SAP's Antitrust All-Clear Ignites a Rebound, But the Margin Debate Rages On

SAP's antitrust overhang lifts, shares jump 3.75% as €2.6B buyback, insider purchases, and strong cloud backlog signal confidence.

The regulatory cloud that has hung over SAP for months lifted on Monday, sending Europe's most valuable software maker sharply higher. The Bundeskartellamt has closed its abuse-of-proceedings probe into the company without imposing any conditions, removing a legal overhang that had weighed on investor sentiment since competitor Celonis lodged a complaint over data-access practices.

Shares responded with a robust advance, trading at €165.38 in Monday's session, a gain of 3.75 percent. The move extends a recovery that has been building since late July, though the stock still sits roughly 5.14 percent below its 200-day moving average — a technical reminder that the longer-term downtrend has yet to be fully reversed.

A Multi-Pronged Vote of Confidence

Monday's rally wasn't driven by the antitrust decision alone. SAP simultaneously launched the second tranche of its 2026 share buyback program, worth up to €2.6 billion, equivalent to approximately 18.5 million shares. The broader program, running through the end of 2027, is sized at €10 billion — a signal from management that it sees value in its own equity at current levels.

The shareholder register is also shifting in a more supportive direction. Anchor investor Harald Tschira boosted his voting rights stake from 0.57 percent to 4.22 percent over the weekend through binding agreements with additional family entities, according to a voting rights disclosure. The move strengthens the company's long-term oriented investor base.

Adding to the confidence signals from the top: CEO Christian Klein acquired company shares worth €325,219 on July 24 at an average price of €133.60 — well below current levels. Insider purchases of that nature are often read as a statement of conviction from the executive suite.

The Cloud Engine Keeps Humming

Underpinning the positive sentiment are the second-quarter results reported on July 23. Cloud revenue climbed 22 percent year-on-year to €6.28 billion, or 24 percent on a currency-adjusted basis. The current cloud backlog — a key forward-looking indicator — expanded to €22.9 billion, up 27 percent, signaling sustained demand momentum into coming quarters. Total revenue reached €9.88 billion, while group net income advanced 26 percent to €2.21 billion and free cash flow came in at €3.0 billion.

The company did, however, trim its 2026 guidance for non-IFRS operating profit to a range of €11.8 billion to €12.2 billion, down from the previous €11.9 billion to €12.3 billion. Management attributed the adjustment to dilution effects from the July completions of the Dremio and Prior Labs acquisitions, which are designed to bolster SAP's "Business AI" platform.

Analysts Split on the Valuation Question

The Street remains divided on where SAP goes from here. Jefferies' Charles Brennan reaffirmed a "Buy" rating with a €210 price target on Monday, pointing to a cloud order book that has exceeded expectations. Goldman Sachs also maintained its "Buy" stance on July 27 but trimmed its price objective from €230 to €215.

At the other end of the spectrum, DZ Bank cut its target to €120 on July 24, citing concerns over near-term margin development. Between those poles, price targets currently span from €164 to €215, with most houses holding onto positive ratings despite selective adjustments. The wide dispersion underscores a market still wrestling with how to value SAP's cloud transformation.

The Margin Question Looms Large

The central tension for investors is whether SAP can translate its double-digit cloud growth into commensurate profit expansion. Operating profit under the non-IFRS measure rose just 7 percent in the second quarter to €2.74 billion — notably slower than the revenue trajectory. The guidance reduction, while modest, raises the question of how long the dilution from the two acquisitions will persist. If integration proves costlier or slower than anticipated, margin pressure could extend well into the second half.

There's also the matter of the underlying dispute with Celonis. While the cartel office has closed its preliminary investigation without conditions, the broader industry debate over data-access practices is unlikely to disappear entirely.

What's Next

The next meaningful checkpoint arrives on October 21, when SAP reports third-quarter numbers. Until then, the buyback program should continue to provide a floor under the stock, and the cloud backlog offers visibility into near-term revenue. But the margin trajectory remains the metric that will ultimately determine whether this rebound has staying power — or whether the recent gains prove to be another head-fake in a still-uncertain trend.