SAP's Twin AI Acquisitions and Healthcare Push Set the Stage for a Pivotal Sapphire Week

SAP announces Prior Labs and Dremio acquisitions, healthcare partnership with Fresenius, and reaffirms cloud revenue targets despite stock decline ahead of Sapphire conference.

SAP enters one of its most consequential weeks of the year with a flurry of strategic moves, but the market's mood remains decidedly cautious. The stock closed at €147.16 on Friday, down 1.45% on the day and roughly 27% lower since January — a stark contrast to the ambitious narrative the company is building around artificial intelligence and cloud transformation.

Two Deals, One Strategy

In the first week of May, SAP announced two acquisitions aimed at accelerating its AI capabilities. The company is buying Prior Labs, a specialist in AI-powered applications, and has signed an agreement to acquire Dremio, whose data-lakehouse architecture connects SAP's proprietary data with external sources. Both deals are designed to bolster what SAP calls "Agentic AI" — systems capable of autonomously managing complex business processes.

The acquisitions are part of a broader push to reduce reliance on traditional licensing models and strengthen the cloud platform. The timing is no coincidence: the Sapphire & ASUG Annual Conference kicks off in Orlando on May 11, with a dedicated financial analyst conference scheduled for May 13. That session will feature CEO Christian Klein, COO Sebastian Steinhaeuser, CTO Philipp Herzig, and board member Muhammad Alam, offering investors their best look yet at how the newly acquired technologies fit into the product roadmap.

Healthcare Gets a Fresh Infusion

Alongside the acquisitions, SAP and Fresenius have taken a concrete step forward in their healthcare ambitions. The two companies are jointly investing in Avelios Medical, a developer of a cloud-native hospital information system built on SAP's Business Technology Platform. The partnership was first announced in January, with both sides signaling a mid-three-digit million-euro investment over the medium term.

The goal is to create a European integrated health ecosystem using open standards like HL7 FHIR, enabling connections between hospital information systems, electronic patient records, and medical applications. For SAP, this represents a tangible use case for its cloud platform in a sector ripe for digitalization.

Dividend Delivered, Cloud Targets Intact

Shareholders received the €2.50 per share dividend for fiscal 2025 on May 8 — a 6.4% increase from the prior year — after approving it at the annual general meeting on May 5 with 99.94% support for a charter amendment enabling electronic shares. The payout came as the stock trades barely 5% above its 52-week low of €139.12.

Despite the share price weakness, SAP is standing by its full-year guidance. Cloud revenue is expected to reach between €25.8 billion and €26.2 billion in 2026, building on the nearly €6 billion booked in the first quarter. The company also targets a non-IFRS operating result of €11.9 billion to €12.3 billion. Management has cautioned, however, that second-quarter cloud growth will slow due to non-recurring effects.

What Sapphire Must Deliver

The Sapphire conference will test whether the market buys SAP's story. With the stock trading well below its 200-day moving average of roughly €198, investors need more than acquisition announcements. They need concrete demonstrations of how the Prior Labs and Dremio technologies will translate into revenue, and whether the Avelios partnership can scale beyond a single use case.

Klein will have another opportunity to make the case on June 3, when he appears at the BNP Paribas Exane CEO Conference in Paris. But for now, all eyes are on Orlando — and on whether SAP can turn its AI ambitions into a narrative that lifts a stock that has lost more than a quarter of its value this year.