SAP’s July 23 Verdict: Can One Earnings Report Silence the AI Skeptics?

SAP shares have lost 33% YTD amid AI-driven sector concerns, but analysts see upside with an average target of 221 euros. Q2 results on July 23 could be a catalyst.

The narrative around SAP has flipped from a steady enterprise software leader to a stock that’s shed nearly half its value. Trading just above a fresh 52-week low of 130.80 euros, the shares closed Friday at 135.96 euros after a 3.94% bounce — a modest recovery that does little to erase the 33% year?to?date decline. The 200?day moving average sits at 183.34 euros, a level the stock hasn’t touched in months, underlining just how far sentiment has shifted.

The Oracle Effect and a CEO’s Throwaway Line

What’s weighing on SAP isn’t a broken business model — operating metrics remain solid — but a structural fear that the market no longer values classic enterprise software the way it did before generative AI upended the sector. That anxiety crystallised when Oracle announced plans to sink as much as €95 billion into AI infrastructure, a move that stoked fears of margin compression across the entire industry. Then CEO Christian Klein added fuel to the fire, speculating in an interview that “no one will develop software anymore” in three to four years. The remark, though forward?looking, fed existing concerns about SAP’s traditional licensing model and accelerated the selling.

Q1 Numbers That Should Have Calmed Nerves — But Didn’t

First?quarter results were anything but disastrous. Total revenue rose 6% to €9.56 billion, while cloud revenue jumped 27% on a currency?adjusted basis to just under €6 billion. The cloud backlog stood at €21.9 billion. Those are growth rates most software companies would envy. Yet the market yawned — better?than?expected prints have failed to spark any sustained rally, leaving analysts to wonder whether even strong Q2 figures, due on July 23, can turn the tide.

Analysts Disagree, but the Buy Camp Holds Firm

The professional consensus is split, though leaning bullish. Jefferies lowered its price target from 230 to 210 euros — still well above the current level — citing weak sentiment for European software rather than any SAP?specific flaw. UBS rates the stock a Buy with a 205?euro target, while Berenberg sticks with Buy and 215 euros. The most optimistic call comes from Bernstein at 276 euros, more than double Friday’s close. Across nine analyst estimates, the average target stands at 221.25 euros. On the flip side, DZ Bank has had a Sell rating since April, and JP Morgan sits at Neutral. Morningstar, however, awards SAP five stars as “significantly undervalued” and points to a durable competitive moat.

The July 23 Deadline and the Quiet Period That Precedes It

Since June 22, SAP has been in its pre?earnings quiet period — management offers no comment on revenue, margins, or guidance until the Q2 release. That leaves roughly four weeks with zero internal catalysts. The second?quarter numbers, followed by an analyst conference call at 11 p.m. German time, will be the first chance for Walldorf to directly address the AI debate. A strong cloud print and reaffirmed full?year guidance could shift the mood; a miss would likely send the stock back to re?test 130.80 euros.

The silence has already coincided with unusually thin trading. Volumes recently dropped to about a quarter of the daily average, suggesting the slide wasn’t driven by panic but by a steady, low?key drip of selling pressure.

Migration Momentum and a BSI Milestone

Underneath the bearish headlines, the fundamental business continues to churn. The 2026 ISG Provider Lens report for Germany documents that domestic companies are accelerating their migration from SAP ECC to S/4HANA, driven by the looming end of mainstream support for ECC. ISG Director Matthias Paletta notes a strategic shift: firms now decide who accesses which data and who bears operational responsibility before committing to process changes — migration as a business decision, not an IT project.

Separately, in June, the German Federal Office for Information Security approved SAP’s Walldorf cloud infrastructure for handling classified material at the “Nur für den Dienstgebrauch” (restricted) level. SAP claims it is the only provider able to run both its own and customer applications in a VS?NfD?compliant manner on its platform. The certification is an intermediate step toward full ISO 27001 accreditation. While this won’t move the share price next week, it could be a long?term growth lever for public?sector and defence business — exactly the sort of revenue stream that might help cushion the margin worries that currently dominate the conversation.

The Defining Question

SAP has the cloud bookings, the analyst support, and a regulatory edge in sensitive government markets. What it lacks is investor conviction that its valuation can withstand the AI narrative shift. July 23 won’t provide all the answers, but it will be the first real test of whether strong operational performance can still command the premium it once did. For a stock trading at 136 euros — roughly 25% below its 200?day average — the distance to a rebound is steep, but the catalysts are not imaginary.