SAP's Split Analyst Verdict: Jefferies Lifts Target as Barclays Trims, Cloud Backlog Tops €22.9 Billion

Jefferies lifted its SAP target to €220 while Barclays cut to $242 ahead of Q3, as cloud backlog rose 27% to €22.9 billion in Q2 2026.

Wall Street is sending mixed signals on SAP ahead of the software group's third-quarter report, with two major research houses moving their price targets in opposite directions on the same day. Jefferies analyst Charles Brennan raised his target on the Walldorf-based company to €220 from €210 while reaffirming a buy rating, pointing to a quieter news flow in the coming quarter and a solid order intake. Barclays, by contrast, trimmed its own target to $242 from $255, though it kept its Overweight rating intact — a sign that its confidence in SAP's cloud trajectory remains unshaken even as IT spending conditions stay demanding.

The divergence extends to JPMorgan, where analyst Toby Ogg held a Neutral stance with a €175 target, expecting results that merely match market consensus. That spread — from €175 to €220 — captures the broader debate over how SAP should be valued in the medium term, with bulls leaning on the steady migration of customers to recurring cloud contracts and bears flagging macroeconomic uncertainty and fierce competition.

Cloud Backlog and Buyback Provide Fundamental Ballast

The numbers from the second quarter of 2026 give the optimists plenty to work with. Current cloud backlog, the subscription revenue SAP expects to book over the next twelve months, climbed 27% to €22.9 billion by the end of June. Total quarterly revenue rose 9% to €9.88 billion over the same period, while profit for the period hit €2.21 billion — roughly a quarter above the year-earlier figure.

Beyond operations, SAP is leaning on capital markets to support its share price. A buyback program announced in January authorizes up to €10 billion through the end of 2027, with one tranche launched at the end of July covering the repurchase of stock worth as much as €2.6 billion.

The stock closed yesterday at €183.76, up 0.6%, and trades 9.8% above its 200-day moving average.

AI Investments and Customer Wins Shape the Growth Story

SAP's management is betting heavily on artificial intelligence to keep growth humming. Under its "autonomous enterprise" concept, the company is pushing both its core platform and an autonomous software suite. Having completed the acquisition of specialist Dremio, SAP now plans to channel more than €1 billion over four years through the Prior Labs project into unlocking structured enterprise data for AI applications.

The July closing of the Prior Labs deal brought in expertise around tabular AI models, reinforcing the technological foundation SAP is building in the software sector. On the customer side, HARTING has been advancing its own transformation since the start of September through the RISE with SAP program — the kind of migration and new-client win that underpins recurring revenue and long-term customer retention.

Margins in the Crosshairs as Q3 Looms

The autumn interim report will be the next major checkpoint for the group. Investors will be watching closely to see how the recent acquisitions feed into operating profitability, and whether cloud growth can carry the adjusted full-year targets for operating profit. Heavy development spending and the integration of takeovers could weigh on margins — a risk that keeps some analysts on the sidelines even as the cloud story rolls on.