SAP’s Rally Builds on Three Pillars: Buybacks, Regulatory All-Clear, and a Cloud Backlog That Keeps Growing

The software giant’s shares have staged a remarkable comeback over the past month, climbing nearly 30 percent as investors digest a steady stream of positive catalysts. Yet beneath the surface of that rally sits a more complicated picture — one involving an internal conflict-of-interest probe, a trimmed profit forecast, and technical signals that suggest the pace of gains may be running ahead of itself.

The Buyback Machine Grinds On

SAP’s €10 billion share repurchase program, announced in January and slated to run through the end of 2027, continues to provide a steady floor under the stock. In the final trading days of July — from the 27th through the 31st — the company acquired roughly 2.18 million shares on Xetra for approximately €344.3 million, at a daily weighted average price of €157.62 per share. That tranche, which began on July 27, authorizes purchases of up to €2.6 billion through January 27, 2027.

The first tranche of the program had already seen SAP buy back just over 16.28 million shares at an average price of €161.16, representing roughly €2.6 billion in volume through June 30. For shareholders, the message is twofold: management considers the stock undervalued despite its recent weakness, and the buyback provides a technical bid that supports demand.

Adding to the confidence signals from inside the company, SAP reported a director’s dealing on July 27 involving CFO Dominik Asam — a purchase that investors typically read as a vote of confidence from the executive suite.

Regulatory Clouds Lift

The buyback momentum got a meaningful assist from Berlin. On July 30, the Bundeskartellamt — Germany’s Federal Cartel Office — closed its preliminary investigation into SAP without launching an abuse-of-proceedings case. The probe had been triggered by complaints from software firms, including Munich-based Celonis SE, which accused SAP of hampering customers and third-party providers in their data usage while favoring its own process-mining software, Signavio.

Cartel office chief Andreas Mundt stressed that companies must generally be able to use their own data in applications from other providers, noting that non-discriminatory data access is critical for competition on large software platforms. The underlying legal dispute between SAP and Celonis continues before a court in California, but the cartel office’s decision removes a regulatory overhang that had weighed on the stock’s valuation for months.

That ruling followed another regulatory milestone: in early July, the European Commission wrapped up its review of guidelines for maintenance and support of on-premise solutions. Together, the two developments clear away uncertainty that had been a persistent drag on sentiment.

Should investors sell immediately? Or is it worth buying SAP?

Strong Numbers, Slightly Softer Guidance

The operational backdrop remains solid. SAP reported second-quarter earnings per share of €1.89, up sharply from €1.45 in the year-earlier period. The cloud backlog climbed 27 percent to €22.9 billion — 26 percent on a currency-adjusted basis — while cloud revenue grew 22 percent, or 24 percent adjusted for currency effects.

That growth narrative has been the engine behind the stock’s recovery from its July low. But the company also trimmed its full-year outlook: non-IFRS operating profit for 2026 is now expected to land between €11.8 billion and €12.2 billion, roughly €100 million below the previous plan. Management attributes the adjustment solely to costs tied to two acquisitions — data-lakehouse specialist Dremio and AI developer Prior Labs, the latter of which closed on July 17. Both deals are designed to strengthen SAP’s data platform and accelerate its new AI Agent Hub.

The timing is notable: that AI Hub sits squarely in the same territory as the internal conflict-of-interest incident that surfaced this week. SAP had publicly celebrated its partnership with automation specialist n8n while an internal team was apparently working on a competing product. The board has taken personnel measures in response, though details have not been disclosed. The episode underscores the pressure SAP faces in presenting a credible AI and automation strategy externally while multiple internal teams appear to be building overlapping solutions.

CEO Christian Klein acknowledged the broader challenge in a recent interview with the Süddeutsche Zeitung, saying he feels the pressure to push the company’s AI products forward more quickly.

Analysts Adjust, But Stay Constructive

Following the half-year results on July 23, several banks trimmed their price targets on July 27 while maintaining positive ratings. Goldman Sachs lowered its target from €230 to €215, keeping a “Buy” rating — analyst Mohammed Moawalla pointed to the robust cloud subscription backlog and a strong product pipeline. Berenberg cut its target from €215 to €205 but also held its buy recommendation. Barclays had earlier reduced its target on July 28, citing short-term cost uncertainties, while reaffirming an “Overweight” stance.

The Technical Picture: Strong, But Stretched

The stock closed Friday at €178.46, up 3.35 percent on the day, and added another 0.47 percent on Monday to reach €179.30. Over the past 30 days, the gain totals 29.65 percent — a powerful rebound from the July trough. Yet the shares remain nearly 29 percent below their 52-week high of €251.70, set in August of last year, and are still firmly in negative territory for the year to date.

The 14-day relative strength index sits at 74.8, a reading that signals overbought conditions and raises the possibility of a short-term pullback. The next major test comes with third-quarter results, expected on October 21, which will show whether the accelerated cloud growth carries into the second half. Between now and then, the n8n episode may offer investors a window into just how serious SAP is about internal discipline in its AI strategy.