SAP’s Sapphire Offensive: Three Acquisitions and a Deeper Microsoft Tie-Up Leave the Stock Stuck Near Lows

SAP reports 27% cloud revenue growth and €21.9B backlog, but stock nears 52-week low amid cautious Q2 outlook and aggressive expansion via data acquisitions.

The numbers tell a story of strength. Cloud revenue sprinting 27% higher. A €21.9 billion order backlog. Operating profit up by a quarter. Yet SAP’s stock is languishing near its 52-week trough, down almost 29% since the start of the year. That disconnect was laid bare at the Sapphire conference in Orlando, where management unveiled an unusually aggressive expansion plan – three bolt-on acquisitions plus a deeper alliance with Microsoft – but failed to arrest the slide.

The biggest structural move targets data fragmentation, a roadblock that the company says kills many corporate AI projects before they start. Over the past two months, SAP has announced the purchase of three data specialists: Prior Labs, Reltio and Dremio. The Reltio deal has already closed; the Dremio acquisition, an open platform designed to connect disparate data sources, is signed and slated to close in the third quarter of 2026, pending regulatory approvals. Together, the trio is meant to transform SAP’s in-house data cloud into a full pipeline, freeing information locked inside proprietary formats so it can feed AI workflows.

Alongside the spending spree, SAP is doubling down on its existing partnership with Microsoft. At Sapphire, the pair said they would more than double the number of customers participating in a joint cloud-migration initiative by the end of 2026. A global engineering team will help clients lift legacy ERP systems onto Azure more quickly. Beyond the migration work, the two companies are building a shared AI platform that aims to turn corporate data into intelligent business processes in real time.

Operationally, the Walldorf-based group delivered a solid first quarter. Cloud revenue reached nearly €6 billion on a currency-adjusted basis, while the cloud order book breached the €21 billion mark. The free cash flow target for the full year remains around €10 billion, and the board is holding its overall annual guidance. Yet management cautioned that the current second quarter would see slower cloud growth because of one-off effects – a remark that has kept investors on edge.

The stock reflected that unease on Monday, sliding more than 2% to €144.10, a whisker away from its 52-week low of around €144.18. Technically, the shares are trading well below the 200-day moving average, a sign that the broader trend remains bearish despite the flurry of strategic announcements.

All eyes now turn to July 23, 2026, when SAP reports second-quarter results. Analysts will be watching the operating margins closely, and they will want concrete detail on how much revenue the new data acquisitions are expected to contribute. Until then, the gap between a company that is firing on all operational cylinders and a stock that cannot find its footing is likely to persist.