SAP's Radical Overhaul: CEO Klein Puts AI on a War Footing as Shares Sink 46%

SAP CEO Klein leads AI pivot 'Project Fuji', cutting 10,000 jobs, as stock drops 46% in 12 months. Key risks and earnings preview.

In a move that underscores the depth of the crisis, SAP chief executive Christian Klein has taken direct command of the software giant’s artificial intelligence development. Dubbed "Project Fuji", the restructuring eliminates layers of middle management, placing Klein at the helm of product and engineering teams. The message to the market is clear: the old ways are failing, and only a hands-on, breakneck pivot to AI can save the company’s future. Yet investors remain unconvinced, and the stock continues to bleed.

Shares of the Walldorf-based company closed at €139.64 on Friday, a drop of roughly 2% from the prior session’s €142.48. The slide has been brutal: a 31% decline since the start of the year and a staggering 46% loss over twelve months. The current price sits almost 48% below the 52-week high of €266.00, and only 6.2% above the year’s low of €130.80, reached on June 25.

Klein’s vision for SAP’s transformation is “the autonomous company.” By the third quarter, the group plans to deploy more than 200 AI agents to orchestrate internal processes—and eventually deliver the same efficiency to customers. To finance this leap, SAP is slashing every cost not directly tied to AI. Hiring freezes, travel bans, and, according to the latest disclosures, plans to cut up to 10,000 jobs are now in force. The aim is to protect the operating margin while pouring capital into the new infrastructure.

But the road is fraught with risk. A recent study by consultancy Horváth found that roughly 65% of ongoing SAP transformations are riddled with deficiencies. If the core migration process is shaky, critics argue, no amount of AI polish will fix it. Adding to the anxiety, a critical security flaw registered as CVE-2026-44748 with a severity score of 9.9 has undermined customer confidence at a time when many are moving to S/4HANA Cloud.

The market is watching three key numbers. First, the ongoing share buyback program is pumping €2.6 billion into the stock through the end of July, providing a technical floor. Second, the relative strength index (RSI) at 46.9 signals a neutral position, not yet oversold. Third, cloud backlog growth of 25% (currency-adjusted) shows the core business still has strong demand. Bullish investors point to these factors as evidence that the sell-off may have overshot.

Yet the bearish case is equally compelling. Analysts have lowered their expectations for SAP’s gross margin in the second half of 2026 to 72.8%, as the heavy spending on external partnerships and platform build-out eats into profitability. The stock remains nearly 23% below its 200-day moving average of €181.08, a classic bear-market signal. And the wider software sector has been rattled by Oracle’s massive investment announcements, adding a peer-pressure headwind.

The next big inflection point is July 23, when SAP releases its quarterly results. Management’s current earnings forecast stands at an operating profit between €11.9 billion and €12.3 billion for the full year. Any deviation from that range—given the extreme 46% annualized volatility—could trigger violent swings. At the same time, the stock’s technical support at €130.80 will be tested. A break below that level would open the door to multi-year lows; a successful hold could spark a summer consolidation.

Klein’s bet is audacious: he believes that whoever owns the customer data will win the AI race, and SAP sits on a treasure trove of business data from its DACH-region private cloud installations. Until the July 23 numbers prove that the cost surgery is working and the AI agents can deliver measurable margin improvement, shareholders are left paying the entry fee for a race whose finish line remains distant.