SAP Shares Navigate Strategic Shift Amid Market Correction

SAP shares near yearly low as company shifts AI billing to usage-based model in 2026, launches major share buyback, and faces competitive AI market challenges.

SAP's stock is currently weathering a significant price adjustment, coinciding with a profound strategic transformation within the company. Trading near €149, the equity is hovering close to its lowest level of the past year. This market movement unfolds as the software giant prepares a fundamental overhaul of its billing model for artificial intelligence services, scheduled for July.

A Substantial Buyback Initiative Provides Support

In response to the declining share price, SAP has initiated a considerable share repurchase program. During just one week in late March, from the 23rd to the 27th, the corporation purchased nearly four million of its own shares via the Xetra trading platform. This activity is part of an initial tranche valued at up to €2.6 billion, which itself is a component of a broader €10 billion buyback scheme extending through the end of 2027.

The market signal from this action is unambiguous. However, its ultimate effectiveness will be determined by developments on the product and commercial front.

Transitioning from Subscriptions to Consumption-Based Pricing

Come July 2026, SAP will shift its AI services from a subscription-based model to a usage-based billing structure. The company believes its traditional Software-as-a-Service (SaaS) approach—relying on fixed fees per user—is no longer suited for a landscape increasingly dominated by automated AI agents. This change will replace predictable revenue streams with more volatile, consumption-dependent income, a risk factor the market is currently pricing in.

Compounding this challenge are findings from the DSAG Investment Report 2026. The report reveals that 77% of surveyed members who use AI productively rely on non-SAP solutions. A mere 3% utilize SAP's own AI tools. This statistic presents a sobering starting point for a firm banking on AI monetization to drive its growth trajectory.

To bolster the data foundation for its AI platform, SAP plans to acquire master data specialist Reltio, likely in the second or third quarter of 2026. The intended goal is to assist customers in preparing both SAP and non-SAP data for AI applications.

Analyst Sentiment: Cautious but Constructive

Barclays analyst Sven Merkt recently adjusted his outlook, lowering his price target for SAP shares from €240 to €220. He cited increasing competitive pressure from novel AI solutions that could disrupt established software architectures faster than previously anticipated. Despite this reduction, Merkt maintained his "Overweight" rating on the stock.

Broader analyst consensus remains favorable despite the share price retreat of more than 26% since the start of the year. Thirty-six market experts project an average earnings per share of €7.31 for 2026, representing an approximate 16% increase over the prior year. For its part, SAP is targeting a non-IFRS operating profit ranging between €11.9 billion and €12.3 billion.

The next concrete milestone will arrive with the release of first-quarter figures on April 23, 2026. Investors will scrutinize these results for evidence of progress in monetizing the "Business AI" portfolio and for management's ability to credibly defend its financial guidance.