SAP Bets EUR 1 Billion on Structured Data While Buybacks and Analyst Split Define the Run-Up to Q3

SAP commits over EUR 1 billion to Prior Labs and completes Dremio and Reltio deals, as cloud backlog hits EUR 22.9 billion, up 27 percent.

SAP is placing a hefty wager that the next wave of enterprise AI will be won not with large language models, but with the messy, structured business data that sits inside ERP systems. The Walldorf-based software group has committed more than EUR 1 billion over the next four years to Prior Labs, the developer of tabular foundation models it recently acquired, with plans to grow the operation into a dedicated laboratory for structured business data.

That outlay sits at the center of a broader portfolio reshuffle. SAP has also wrapped up its purchase of Dremio, a data lakehouse platform intended to serve as the technological backbone for running complex AI agents inside ERP environments. Add in May's takeover of master-data specialist Reltio, and the company has assembled the core pieces of a modern data-management stack — one aimed at letting customers automate internal workflows far more aggressively than today's tools allow.

Cloud Backlog Offers a Cushion

The acquisitions carry a cost. SAP has adjusted its full-year 2026 outlook for non-IFRS operating profit to reflect dilution from Dremio and Prior Labs. Offsetting that drag is a core business still expanding at a healthy clip: the cloud backlog reached EUR 22.9 billion at the midyear mark, up 27 percent year over year. Cloud revenue alone climbed 22 percent in the second quarter, while total group revenue rose 9 percent over the same stretch.

Management is also keeping an eye on the developer side of the house. On Thursday, SAP rolled out updates to its Cloud Application Programming Model, lifting runtimes to Node.js 10.1 and Java 5.1. And on the leadership front, the company has locked in continuity: CEO Christian Klein's contract now runs through April 2030, with CFO Dominik Asam extended to March 2028 — a multiyear mandate to see the transformation through.

A "Historic Opportunity" With Strings Attached

Klein is framing the moment in sweeping terms. In comments reported by Handelsblatt, he described the new AI-driven products as a "historic opportunity" for meaningful growth — but attached a blunt condition: SAP must prove that potential in real-world customer deployments. The remarks land as investors hunt for fresh catalysts to justify the stock's valuation.

The shares have been consolidating. In Monday trading the stock changed hands at EUR 184.08, a decline of 0.7 percent on the day. A separate reading put the price at EUR 184.30, down 0.6 percent, though that level still sits roughly 10 percent above the 200-day moving average of EUR 166.81. Year to date, the stock is off 12 percent.

Analysts Diverge Ahead of Q3

Institutional opinion is far from unified. Jefferies raised its price target on September 22 from EUR 210 to EUR 220 while reiterating a "Buy" rating, pointing to further upside in the software maker's business trajectory. JPMorgan struck a more cautious tone the same day, keeping a "Neutral" rating with a EUR 175 target. Targets across the Street stretch as high as EUR 226, even as more circumspect voices argue for patience until the earnings contribution from the new offerings actually shows up in the financials.

Meanwhile, SAP continues to support its share price through an ongoing buyback. Regulatory filings show the company repurchased 50,000 of its own shares between September 14 and September 18 under the existing program.

What market participants are watching now is whether demand for the new software keeps pace with management's ambitions. The coming quarterly reports should offer the first hard evidence of how quickly enterprise customers adopt the new tools — and whether the growth dynamic Klein describes starts to register in the numbers.