Shares of Germany’s SAP have continued their downward trajectory, reaching their lowest point since August 2024. This decline, part of a more extensive selloff affecting software stocks in Europe and on Wall Street, has resulted in a staggering loss of approximately $130 billion in market value since the company’s peak in the previous year.
Currently trading at about 233 billion euros ($273 billion), SAP has seen its stock price decrease by 2.4% in Frankfurt, marking a significant drop from its all-time high of 344 billion euros in February 2025. Analysts suggest that while some concerns surrounding the company’s future are valid, they are not related to existential threats but rather to perceptions of the value of its services as the industry evolves.
Angelo Meda, a portfolio manager at Banor SIM, emphasized the importance for SAP to accelerate its transition to cloud services. He pointed out that advancements in artificial intelligence are making it easier to develop software modules, leading to fears that the average selling prices of services and billable hours may decrease.
SAP’s latest outlook, released in October, projected full-year cloud revenue at the lower end of expectations, although operating profit was anticipated to be closer to the higher end. With results set to be reported next week, the sentiment surrounding software companies—particularly SAP—has been notably pessimistic. Jefferies analyst Brent Thill remarked that the current valuation of SAP is nearing historical lows, reflecting the challenging environment for software stocks.
Despite this grim outlook, some traders are positioning themselves for potential gains ahead of the forthcoming earnings report, although market indicators are also presenting fresh sell signals. The S&P 500 software index has already reported a 7.2% decline this year, confirming the ongoing turbulence in the sector.
