BlackRock Adds to SAP Bet as Ericsson and Madrid Provide Fresh Cloud Credentials — But RSI Warns of Overbought Rally

BlackRock lifts SAP stake to 6.53% as cloud deals with Ericsson, Madrid boost narrative; stock up 10% from low but analysts see 45% upside.

BlackRock has quietly raised its stake in SAP, converting a portion of a call option into shares and lifting its voting rights from 6.24% to 6.47%. By May 11, the world’s largest asset manager reported a total holding of 6.53%. The move arrived just as the stock had bottomed out at a new 52-week low of around €135, triggering a snapback that carried the shares past both the €150 mark and the 50-day moving average — an early chart-based buy signal.

That institutional vote of confidence comes alongside tangible customer wins that strengthen SAP’s cloud narrative. Ericsson is expanding its partnership to deploy SAP Business Data Fabric, aiming to standardise data flows and accelerate AI workloads across multiple business units. In the public sector, the city of Madrid has selected SAP to overhaul its tax and internal management processes, signalling that integrated cloud platforms are gaining traction with government clients as well. Meanwhile, automotive supplier Martur Fompak International has gone live with an automated material-flow system that uses SAP’s Joule AI assistant to control robots. Early project data points to higher throughput and fewer errors — a practical demonstration of SAP’s “autonomous enterprise” vision.

The stock currently trades at roughly €151-152, good for a 10% recovery from the 52-week trough but still 44% below the year high of €271.60. That gap reflects deep structural concerns. Cloud growth has fallen short of expectations, and investors worry that AI-native software could disintermediate SAP’s business model over the long term. Technically, the picture is mixed. The shares have reclaimed the 50-day moving average at €149.52, but remain well under the 200-day line at €193.38. The relative strength index has surged to 86.9 — deep in overbought territory — suggesting the recent rally may be overheating.

Analysts remain decidedly bullish on the name. Deutsche Bank reiterated a €200 price target on May 18, while Jefferies sees fair value at €230, arguing that innovations showcased at the Sapphire customer conference align well with the cloud strategy. The consensus target of €221.25 implies theoretical upside of more than 45% from current levels. Yet price targets do not guarantee a smooth path.

On the numbers side, SAP delivered currency-adjusted cloud revenue growth of 27% in the first quarter, reaching nearly €6 billion. Management continues to guide for full-year operating profit between €11.9 billion and €12.3 billion. The next hard checkpoint is July 23, 2026, when second-quarter results land. Until then, the Ericsson, Madrid and Martur Fompak wins help keep the cloud story credible, as does the recently closed acquisition of Reltio.

SAP is also buying its way into the AI stack. Early this month it announced two purchases: Dremio, a data-lakehouse provider built on Apache Iceberg, and Prior Labs, an AI laboratory focused on tabular enterprise data. SAP has committed roughly €1 billion to Prior Labs over four years. Both transactions are expected to close in the second or third quarter of 2026, pending regulatory approvals. The strategy is clear: shape the AI disruption rather than suffer it.

Whether the rally can turn into a sustained uptrend depends on whether cloud revenue re-accelerates in coming quarters. The next big chart barrier sits between €159 and €162, defined by January and February lows. A clean break there opens the path toward the 100-day moving average near €166. Above that, the overarching downtrend line runs at €180. As long as SAP stays below that level, this move remains a relief rally within a bear market — not a reversal.