The Disconnect at SAP: Cloud Revenue Jumps 27% as Shares Hit Yearly Low

SAP shares near 52-week low despite 27% cloud revenue growth and €21.9B backlog, as Oracle's $95B plan and hawkish Fed weigh. Analysts split; Q2 results July 23.

For a software company that just posted a 27% surge in cloud turnover, the market reaction has been anything but celebratory. SAP’s stock is trading near its lowest point in 52 weeks, while its cloud backlog — a forward-looking gauge of future revenue — has ballooned to €21.9 billion. The gulf between operational reality and market sentiment has rarely been wider.

The shares closed at €135.38 on Thursday, barely above the intraday year-low of €135.00 touched earlier in the session. Since January, the stock has hemorrhaged nearly a third of its value, a slide that has pushed the DAX heavyweight into official bear-market territory. The rout accelerated after a bombshell from across the Atlantic.

Mid-June, Oracle unveiled plans to pump up to $95 billion into its own infrastructure, a figure that blindsided analysts and sent shockwaves through the entire enterprise-software sector. The fear is that such capital-intensive commitments could become the industry norm, pressuring margins across the board. UBS promptly downgraded European IT stocks, adding to the selling pressure.

Yet SAP’s own numbers tell a different story. First-quarter cloud revenue climbed 27% year-on-year, lifting total sales to €9.6 billion. Operating profit rose to €2.9 billion, and the cloud backlog — a key indicator of future billings — swelled to €21.9 billion. Internally, the engine is humming.

That disconnect has split the analyst community. Bernstein Research sticks with a buy rating and a €273 price target, arguing the market has overreacted to the Oracle news and missed SAP’s underlying momentum. JPMorgan, by contrast, maintains a hold and has not lifted its target, creating an unusually wide gap of nearly €100 between the two forecasts.

Macro forces are compounding the pain. The Federal Reserve has signaled a hawkish stance for the second half of the year, dashing hopes for near-term rate cuts. Goldman Sachs now sees no easing before late 2027. Meanwhile, large IPOs — notably SpaceX — are siphoning liquidity from technology stocks, further depressing valuations.

SAP is not standing still. The company recently joined a $60 million funding round for London-based startup Conduct, whose automated code-analysis tools help clients migrate off the legacy SAP ECC system. With roughly half of SAP’s global customers still on that old platform and mainstream support ending in late 2027, the pressure to shift to the cloud is intense. Separately, the shift in buying behavior is reshaping the sales channel: 67% of B2B buyers now insist on purely digital purchasing, and SAP’s own online marketplace already hosts more than 3,600 solutions.

Technically, the stock remains in distressed territory. The relative strength index is deeply oversold, and the 200-day moving average sits far above the current price, offering little near-term support.

The next major catalyst arrives on July 23, when SAP reports second-quarter results. Investors will scrutinize the cloud backlog and gross margin to see if the company can withstand the industry-wide cost pressure. Analysts currently expect full-year earnings per share of €7.22.