SAP's Madrid Vision Meets Market Skepticism as Cloud Backlog Hits €21.9 Billion

SAP unveils Knowledge Graph and 50+ Joule AI agents at Sapphire; cloud revenue jumps 27% to €6B but stock plunges 24% YTD amid investor skepticism.

SAP's European flagship gathering in Madrid wrapped up this week with a clear strategic pitch: the company wants to automate business processes end-to-end using AI agents and a unified data layer. Yet the stock has barely flinched. The cloud backlog swelled to €21.9 billion in the first quarter, and currency-adjusted cloud revenue jumped 27% to nearly €6 billion, but shares still languish roughly 24% below their start-of-year level.

The core of the new push is the SAP Knowledge Graph, an architecture designed to map all enterprise data in a structured way. That foundation is meant to support over 50 specialized Joule assistants — AI agents capable of autonomously preparing and executing tasks in finance, human resources, and other domains. To strengthen the data layer, SAP completed the acquisition of data-management specialist Reltio on May 7 and plans to integrate Dremio in the third quarter of 2026. Together, these deals aim to create an open data fabric connecting SAP's own information with external sources.

The Madrid event, known as Sapphire, wasn't about unveiling major new products. Instead, CEO Christian Klein and his leadership team used the venue to push existing cloud and AI strategies into concrete customer engagements. That's where the partner ecosystem steps in. Consulting and integration firms such as Axians and msg translate SAP's high-level roadmaps into industry-specific solutions, accompanying clients through migrations to S/4HANA or deployments of the Joule AI assistant. These project starts on the exhibition floor are meant to fuel revenue growth in the months ahead.

On the financial front, the numbers tell a story of operational strength. Besides the cloud backlog and revenue gains, profit is also climbing: operating earnings improved 17% in the first quarter. Management is targeting an operating profit above €10 billion for full-year 2026. The dividend for 2025, €2.50 per share, was paid out on May 8. Yet the stock market remains unimpressed. On Thursday, shares traded at €153.62, a fractional 0.31% decline. That is a modest recovery from the 52-week low of €137.62 hit in mid-May, and the stock has gained nearly 9% over the past seven days. Still, it trades roughly 21% below its 200-day moving average, and the year-to-date loss underscores a persistent gap between fundamental performance and investor sentiment.

The next major test comes with second-quarter results, due later this year. By then, the market will look for evidence that the Madrid visions — autonomous processes, a robust data foundation, and deepened partner engagement — are translating into signed contracts and a growing cloud order book. Until then, the disconnect between SAP's operational trajectory and its stock price remains the central puzzle for investors.