SAP's Cloud Backlog Tops €22.9 Billion as Buybacks, M&A and Regulatory Wins Converge
Published on 08/25/2026 at 11:41 | Redaktion boerse-global.de
The software giant's recovery narrative is no longer a single-thread story. Between a fresh Morgan Stanley price-target hike, two completed acquisitions, a stepped-up share buyback and the clearing of European regulatory clouds, SAP is presenting investors with a multi-layered case for owning the stock — even as the shares remain roughly a quarter below their October 2025 peak.
A Backlog That Keeps Growing
At the heart of the bullish thesis sits the current cloud backlog, which expanded 27 percent to €22.9 billion in the second quarter of 2026. Cloud revenues climbed 22 percent during the period, while the cloud ERP suite segment advanced 25 percent and total group sales rose 9 percent. On a currency-adjusted basis, the cloud top line grew 24 percent to €6.28 billion.
Those figures formed the backbone of Morgan Stanley's decision on August 21 to lift its price target on SAP from €190 to €215, maintaining an "Overweight" rating. The revision, picked up in German-language market commentary over the following days, arrived as the stock was already regaining altitude on the back of strong quarterly results and sector-wide M&A speculation.
Two Deals Closed, One Big Check Written
The operational momentum has been accompanied by a brisk dealmaking cadence. SAP has completed the acquisition of Dremio Corporation after securing the necessary regulatory clearances, and shortly thereafter closed the purchase of Prior Labs GmbH. For the latter, the company is planning an investment exceeding €1 billion over a four-year horizon — a sign that SAP intends to scale the acquired business rather than simply absorb it.
Those acquisitions carry a cost, however. SAP has adjusted its non-IFRS operating profit guidance for 2026, flagging a dilution impact of more than €100 million stemming from both transactions. Management's framing is clear: this is an intentional investment price for future growth, not a sign of operational weakness.
Regulatory Pressure Eases on Two Fronts
The dealmaking has been matched by progress on the compliance front. The European Commission has accepted legally binding commitments from SAP addressing concerns around maintenance and support services for on-premises ERP software. Separately, Germany's Federal Cartel Office has closed its preliminary investigation into the company without initiating abuse-of-proceedings. Both developments remove a layer of regulatory overhang that had been hanging over the stock in recent months.
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Buybacks and Customer Wins Add to the Mix
SAP's capital management remains active as well. The company purchased an additional 50,000 of its own shares, bringing the cumulative volume of the current buyback program to more than 5.12 million shares — a signal of management's confidence in the company's valuation that tends to provide a floor under the price.
On the customer front, NTT DATA has selected SAP SuccessFactors and the Joule AI assistant for a global HR transformation, adding another reference client to SAP's roster. Earlier in August, the company announced at its SAP NOW AI Tour Southeast Asia that TCL SunPower is implementing SAP GROW to build a unified cloud ERP platform across its international operations. Such wins bolster the argument that cloud growth is broadly based rather than concentrated in any single region.
The Stock: Recovering, but Not There Yet
The shares closed at €186.98, still 23 percent below the 52-week high of €242.00 set in October 2025. Over the past seven trading sessions, the stock has gained 2.7 percent and now trades comfortably above its 50-day moving average of €152.51. The 30-day picture is even more striking, with a 23 percent advance.
That rebound reflects growing market recognition of SAP's operational progress and the clearing of regulatory risks. The sector backdrop has helped too: on August 14, Reuters reported M&A speculation around Workday, lifting SAP shares by 2.7 percent that day — evidence of how sensitive investors currently are to consolidation dynamics in the cloud segment, even when SAP itself is not directly involved.
Routine disclosures, such as an insider transaction notification involving Gina Vargiu-Breuer in August, have added little directional impetus on their own but round out a picture of a company operating under heightened investor scrutiny on multiple fronts.
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The path back to the October highs remains long, but the combination of a swelling cloud pipeline, a supportive analyst community, a cleared regulatory slate and an active capital returns program gives the bulls a broader base of evidence than at any point in recent months.
