SAP's Cloud Backlog Hits Record as Investors Weigh Buyout Costs Against Growth Momentum
Published on 08/02/2026 at 04:41 | Redaktion boerse-global.de
The numbers that sent SAP shares climbing last week tell a story of two competing forces. Cloud revenue jumped 22 percent and the order backlog swelled to a record €22.9 billion, yet the company simultaneously trimmed its profit outlook for the year. Investors chose to focus on the former, pushing the stock up 13.45 percent over the course of the week — a striking rebound for a share that has spent much of 2026 in the red.
The quarterly report, released on a Friday, showed total revenue rising 9.4 percent to €9.9 billion, while adjusted earnings per share improved to €1.59 from €1.50 a year earlier. The cloud order book grew 26 percent, a figure that analysts read as evidence that demand for SAP's cloud offerings remains robust despite a challenging macroeconomic environment. The company reaffirmed its full-year cloud revenue guidance of €25.8 billion to €26.2 billion at constant currency, with combined cloud and software sales expected to land between €36.3 billion and €36.8 billion.
The Cost of Growth
The profit picture, however, is less straightforward. SAP lowered its non-IFRS operating profit forecast for 2026 to €11.8 billion to €12.2 billion, down from the previous range of €11.9 billion to €12.3 billion. Management attributed the revision to dilution from the acquisitions of Dremio and Prior Labs — a reminder that the company's aggressive expansion strategy carries a price tag that shows up directly on the income statement.
That dynamic was already visible in the second-quarter figures. Non-IFRS operating profit came in at €2.74 billion, with the operating margin slipping to 27.8 percent, a decline of 0.7 percentage points. The cloud gross margin also softened, dropping half a percentage point to 74.3 percent on an IFRS basis. These are the metrics that give bears their ammunition: the cloud transformation is delivering growth, but it is doing so at the expense of near-term profitability.
The market's verdict was nonetheless positive. The stock closed at €159.40, up 1.65 percent on the day, extending a rally that began after the results were published. The shares have now climbed 25 percent from their multi-year low hit on July 23, 2026, though they remain 38.36 percent below the 52-week high of €258.60.
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A Chart That Tells Two Stories
Technically, the stock sits at a pivotal juncture. It is trading roughly 10 percent above its 50-day moving average of €144.49, but still 8.74 percent below the 200-day moving average of €174.67. The relative strength index stands at 64.1, suggesting the shares are approaching overbought territory but have not yet reached it. With annualized volatility of nearly 49 percent, the potential for sharp reversals remains ever-present.
The buyback program adds another layer of support. SAP repurchased approximately 16.28 million shares through the end of June as part of its €10 billion buyback scheme, paying an average price of €161.16 per share — slightly above the current market price. Management's willingness to deploy capital at these levels signals confidence in the company's trajectory, even as the market digests the implications of the recent acquisitions.
Analysts Split on the Outlook
Wall Street's response to the quarterly figures was notably divided. Berenberg trimmed its price target from €215 to €205 while maintaining a buy rating, and Goldman Sachs cut its target from €230 to €215, also keeping a buy recommendation. Both houses appear willing to look past the lowered profit guidance in light of the cloud momentum. One other institution took a far more bearish stance, downgrading the stock to sell with a price target slashed from €130 to €120 — a wide dispersion that underscores just how much uncertainty surrounds the integration costs of Dremio and Prior Labs.
For now, the bulls have the upper hand. As long as the share price holds above the 50-day moving average, the combination of a robust order backlog and reaffirmed cloud guidance supports the case for further recovery. The next technical milestone is the 200-day line at €174.67, a level that would mark a meaningful break from the prevailing downtrend. Should the stock fall back below €144, however, the longer-term bearish pattern that has dominated since the 52-week high would likely reassert itself.
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The real test comes with the third-quarter report later in 2026. By then, investors will have a clearer picture of whether the margin pressure from the recent acquisitions is indeed temporary, as management suggests, or whether the cost of growth is becoming a structural feature of SAP's business model. Until then, the shares are caught between two narratives: a cloud business firing on all cylinders and a profit engine that is, for the moment at least, running less efficiently.
Disclaimer regarding our articles: No investment advice, no buy or sell recommendation. Information on prices, companies, and markets is provided without guarantee; changes are possible at any time. Stock market transactions can lead to substantial losses. Our articles are created and reviewed in whole or in part automatically with the support of AI.
