SAP's Stock Hits a New Low as Oracle's Capex Shock and Triple Witching Overshadow Strong Q1 Results

SAP posts strong Q1 results with 27% cloud revenue jump and 24% profit rise, yet shares hit €134 low amid market anxiety over heavy AI spending and delayed rate cuts.

The German software giant reported a 27% jump in cloud revenue and a 24% rise in operating profit for the first quarter, yet its shares touched a fresh 52-week low of €134.38 on Thursday. The disconnect between solid fundamentals and a stock that has shed nearly half its value from the July 2025 peak of €266 highlights the market's growing anxiety about the capital intensity of the cloud and AI transition. At the closing bell, SAP stood at €135.76, barely above the intraday floor, with the so-called "Hexensabbat" — the quarterly expiry of options and futures on indices and single stocks — threatening to amplify swings on Friday.

The immediate trigger for the latest leg lower came from across the Atlantic. Oracle’s announcement that it plans capital expenditures between $90 billion and $95 billion for fiscal 2027 — well above the roughly $68 billion analysts had penciled in — sent a chill through the European software sector. SAP lost about 4% that day, making it the worst performer in the DAX. UBS added to the pressure by downgrading a swath of European IT stocks, reinforcing fears that heavy spending on AI infrastructure will compress margins. Goldman Sachs subsequently trimmed its forecast for SAP's second-half gross margin, while the Federal Reserve's decision to push rate cuts no earlier than 2027 further depressed valuation multiples for growth names.

Beneath the market turmoil, SAP’s operating engine remains robust. First-quarter revenue climbed to €9.6 billion, the cloud backlog swelled to €21.9 billion, and operating earnings reached €2.9 billion. The company also invested in Conduct, a London-based AI startup founded by former Palantir employees, participating in a $60 million Series A round alongside Index Ventures and ICONIQ. Conduct’s platform modernizes legacy systems and aids complex ERP migrations, and SAP has anointed it a strategic AI partner for transformation projects. Yet the strategic bet failed to move the needle on the stock, which slipped another 2.08% on the day of the announcement.

Analyst views remain sharply divided. Bernstein retains a buy rating and an ambitious price target of €273, implying a doubling from current levels. JPMorgan's Toby Ogg, reaffirming his neutral stance on June 11, set a target of €175 — still some 29% above the last trade. The nearly €100 chasm between the two houses underscores the uncertainty surrounding SAP’s ability to execute its cloud migration without eroding profitability. The cloud shift is progressing, but the migration of on-premise clients to subscription models is moving more slowly than hoped, adding to the bearish narrative.

Technically, the stock is flashing oversold signals. The relative strength index sits at 34.8, while the 200-day moving average of €186 looms more than 27% above the current price, suggesting a trend reversal is far from assured. The immediate support at €134 will be tested during Friday's options expiration, when heavy volume from institutional position rolling could trigger sudden moves. A break below that level might open the door to the €130 area. All eyes now turn to July 23, when SAP reports its second-quarter results and the market will look for evidence that the cloud backlog and margins can sustain the momentum from Q1 — and finally reward the company's AI strategy with higher share prices.