SAP Shares Jump as Nvidia CEO's Reassurance and €3.5bn Debt Issue Signal AI Opportunity

SAP stock rallies 7.7% as Nvidia’s Jensen Huang argues AI will create new applications, not cannibalize; €3.5bn bond, cloud backlog growth, and upcoming CEO conference underpin bullish case.

Investors shrugged off geopolitical jitters on Monday to pile into SAP, sending shares 7.71% higher to €168.46 after Nvidia chief Jensen Huang used his Computex keynote to kill off a lingering fear in the software sector. AI, he argued, will accelerate new applications rather than cannibalise existing ones — a message that resonated loudest among European enterprise software names. The DAX heavyweight’s outperformance was all the more striking given the benchmark index slipped 0.40% to 25,003.04 points, weighed down by tensions in the Middle East and rising energy costs.

The relief rally dovetails with a broader strategic push that SAP has been funding with fresh capital. The group placed a €3.5bn euro-denominated bond in late May, split across four tranches with maturities ranging from two to seven years. Proceeds will cover general corporate purposes and refinance recent acquisitions — notably the closing of Reltio on 7 May and the planned integration of Dremio, expected in the third quarter of 2026. Both deals are designed to tighten the link between corporate data management and AI capabilities, exactly the area where Huang’s commentary has rekindled optimism.

That optimism already had a solid operational foundation. In the first quarter, SAP’s cloud backlog — a key gauge of future subscription revenue — expanded 25% on a currency-adjusted basis to €21.9bn. The cloud ERP suite performed even better, growing 30% year-on-year. The shift from on-premise licensing to recurring cloud contracts is showing in the bottom line too: operating profit rose 17% in the period. A share buyback programme of up to €10bn provides additional support, while a forward price-to-earnings ratio of roughly 21.8 for 2026 leaves the stock looking less stretched than many US software peers.

On the product front, the company is preparing to roll out its AI capabilities more broadly. Joule Studio 2.0 is expected to be available free of charge to customers and partners by year-end, and the upcoming Autonomous Suite bundles more than 200 specialised AI agents covering functions from finance to human resources. These initiatives are central to the investment case that has begun to win back the market’s attention.

Technically, Monday’s close above the €160 resistance level was the clearest signal yet that the recovery has room to run. The next upside targets lie between €183 and €202, according to market observers, while a break back below €134 would put the entire rebound scenario at risk. Short-term momentum indicators are flashing caution: the relative strength index stands at 75.8, firmly in overbought territory. And despite the recent surge, the stock remains 11.67% below its 200-day moving average and 37.88% below its 52-week high. Year-to-date, SAP is still nursing a loss of 16.48%.

All eyes now turn to Wednesday, when chief executive Christian Klein takes the stage at the BNP Paribas Exane CEO Conference in Paris. The market will be listening closely for any signal on how the €3.5bn bond proceeds are being allocated and how the integration of Reltio is progressing. If Klein can tie together the threads of cloud momentum, AI product launches and acquisition-led data strategy, the current rally could gain a more durable foundation ahead of the quarterly results due on 23 July.