SAP’s Dividend Hike and Cloud Resilience Can’t Mask a Bruised Stock

SAP proposes €2.50 dividend at May AGM, but shares near €145.50, down 28% YTD. Cloud revenue grows, yet short interest jumps 31% as bearish sentiment persists.

The software giant is set to reward shareholders with a bigger payout next week, yet the market’s mood remains decidedly sour. SAP’s stock has shed nearly half its value since hitting a record high in February 2025, closing at €145.50 on the eve of the May Day holiday — a far cry from the €268 price target still held by analysts at Meyka AI. The disconnect between operational strength and share price performance is becoming harder to ignore.

A Higher Payout, but Little Cheer

When SAP convenes its virtual annual general meeting on May 5, the board will propose a dividend of €2.50 per share. At current levels, that translates into a yield of roughly 1.7%. Shareholders will also vote on the remuneration report, the appointment of BDO AG as the new auditor, and a fresh authorization to issue convertible or warrant bonds. The meeting comes at a time when the stock is trading well below its 20-day moving average, a technical signal that has amplified bearish sentiment.

Short sellers have taken notice. Short interest jumped by more than 31% in April, reflecting a growing conviction that the shares have further to fall. Since the start of the year, the stock has dropped around 28%, erasing gains built during a strong 2024.

Cloud Growth Remains the Bright Spot

The first quarter painted a picture of a business firing on all cylinders. Total revenue rose to €9.6 billion, while operating profit climbed nearly a quarter. The cloud business, in particular, outperformed market expectations, with demand showing no signs of letting up even as some US rivals warned of deal delays. Analysts point to this resilience as evidence of a durable business model.

Yet the forward outlook has tempered enthusiasm. Management has flagged a slower pace of cloud growth in the second quarter, partly because one-off effects flattered the year-ago comparison. The company also declined to accelerate its full-year revenue growth forecast, disappointing investors who had hoped for an upgrade. An additional drag comes from a multi-million-euro payment tied to the Teradata legal dispute, which will weigh on operating cash flow.

Strategic Moves and Regulatory Headwinds

SAP is pressing ahead with its acquisition of Reltio, a deal expected to close in the second or third quarter. The integration aims to bolster the Business Data Cloud and give customers better master data management capabilities. At the same time, the company is trying to resolve a European Commission probe into whether it stifled competition in maintenance services for older licenses. SAP has offered concessions, including the elimination of certain fees, in an effort to avoid a fine.

On the product front, SAP was recently named the market leader for carbon accounting software by research firm IDC. Its “Green Ledger,” which ties sustainability data directly to financial metrics, earned particular praise. The recognition underscores the company’s push into areas that combine regulatory compliance with digital transformation.

What’s Next for Shareholders

After the AGM, attention will shift to two key events. On May 11, SAP kicks off its Sapphire conference in Orlando, where the management team is expected to unveil new AI-powered solutions. The market will be watching closely for concrete details on how the company plans to monetize these offerings and sustain its cloud momentum.

The next major financial milestone comes on July 23, when SAP reports second-quarter results. A continued strong showing in the cloud business could help narrow the gap between the stock’s current price and its underlying fundamentals. For now, though, the bears remain in control.