SAP's AI Shopping Spree Starts Paying Off as Cloud Engine Powers a 47% Rebound

SAP's €1.5B AI deals yield NTT DATA win; cloud backlog up 27%, but stock overbought and down 8.9% YTD.

The market's verdict on SAP's acquisition binge is getting clearer by the day. After pouring more than €1.5 billion into two AI-focused takeovers this summer, Europe's largest software maker is now showing that the deals can translate into real customer wins — and the stock is responding in kind.

The clearest proof arrived on August 19, when Japanese IT services giant NTT DATA selected SAP SuccessFactors and the SAP Business Data Cloud, complete with the Joule AI orchestrator, to overhaul its global HR operations. The contract win carries particular weight given recent skepticism about how quickly SAP can actually monetize its AI stack.

A Summer of Deal-Making

SAP's acquisition spree unfolded in quick succession. The company closed its purchase of Dremio, a provider of open data-lakehouse technology, on July 6, paying roughly €0.5 billion in cash. Just eleven days later came the completion of the Prior Labs deal, a specialist in tabular foundation models that SAP has earmarked for bigger things: the company pledged more than €1 billion over the next four years to transform Prior Labs into a global frontier AI laboratory.

The two acquisitions, while strategically complementary, came with a cost. On July 23, SAP trimmed its non-IFRS operating profit guidance for 2026 to €11.8–12.2 billion at constant currencies, down from the previous €11.9–12.3 billion range. Management attributed the roughly €100 million-plus adjustment to dilution from the transactions, while leaving the 13–17 percent growth target untouched.

The Numbers Behind the Rally

The market has largely shrugged off the guidance tweak. Since the adjustment, SAP shares have climbed 47.4 percent, a recovery now underpinned by fresh operational evidence that the AI investments are gaining traction.

The second-quarter figures tell the story. Current cloud backlog jumped 27 percent to €22.9 billion (26 percent on a currency-adjusted basis), while cloud revenue advanced 22 percent. The cloud ERP suite segment outperformed with 25 percent growth. Total revenue rose 9 percent, with non-IFRS operating income up 7 percent. For the full year, SAP is guiding to cloud revenue of €25.8–26.2 billion, representing 23–25 percent growth over last year's €21.02 billion.

That momentum has translated into a powerful share-price move. The stock closed the week at €190.86, up 1.0 percent on the day and 20 percent over the past 30 sessions. Yet the rally has also stretched valuations: the relative strength index sits at 71.4, signaling overbought conditions, and the shares trade 22 percent above their 50-day moving average. Despite the recent surge, the stock remains 8.9 percent lower year-to-date and still sits 21 percent below its 52-week high of €242.00.

Buybacks, Insider Activity, and Regulatory Clarity

Beyond the AI narrative, SAP's capital-return program continues to provide a floor. Under its €10 billion buyback scheme running through the end of 2027, the company had repurchased more than 16 million shares at an average price of €161.16 by the end of June — a total outlay of roughly €2.6 billion. In the first week of August alone, SAP bought back around 2.9 million shares at an average of €169.72, bringing this year's cumulative total to approximately 5 million.

Insider activity has added to the sense of confidence. Mid-August saw a company insider acquire 1,700 shares at €179.15 apiece, while BlackRock nudged its voting rights stake up to 6.75 percent at the start of the month.

On the regulatory front, SAP welcomed the European Commission's conclusion of its review into the company's maintenance and support policies for on-premise installations — a clearance that removes a lingering overhang for legacy customers. The company also published 28 new security notices and a GitHub Security Advisory on August 11 as part of its monthly patch cycle.

The combination of double-digit cloud growth, targeted AI acquisitions, and steady capital returns has investors betting that SAP can turn its data-platform ambitions into durable earnings power — even if the dilution from this summer's deals takes a short-term bite out of margins.