SAP's €2.6 Billion Buyback is drawing investor attention after Germany's cartel office ended its preliminary probe, while strong cloud growth and AI investments continue to shape the company's outlook.

SAP's €2.6 Billion Buyback Signals Confidence Despite Profit Outlook Cut

SAP's €2.6 Billion Buyback has emerged as a major talking point for investors after Germany's cartel office dropped its preliminary inquiry into the software giant's data access practices. The decision removes a significant regulatory overhang, while SAP continues to invest heavily in cloud computing and artificial intelligence. Despite trimming its 2026 profit growth forecast, the company is signaling confidence through a €2.6 billion share repurchase program and insider share purchases.

Cartel Probe Ends, but Legal Challenges Continue

Germany's Federal Cartel Office decided not to open formal proceedings into allegations that SAP restricted rival Celonis' access to data in the process mining market. While the decision is a positive development for SAP, legal disputes are far from over.

Competition related cases remain active in the United States and SAP has also filed patent infringement claims against Celonis, meaning the broader legal battle continues.

Strong Cloud Business Drives Growth

SAP delivered encouraging quarterly results despite lowering its earnings outlook. Group revenue increased 9% year over year to €9.88 billion, while cloud revenue surged 22% to €6.22 billion. The company's cloud backlog reached €22.9 billion, reflecting strong customer demand and providing visibility into future revenue. SAP also reported higher IFRS earnings per share, rising from €1.44 to €1.88.

Additionally, AI capabilities are now included in more than 90% of SAP's largest customer contracts, highlighting the company's focus on enterprise artificial intelligence.

SAP's €2.6 Billion Buyback Boosts Confidence

SAP officially launched the second phase of its €10 billion share buyback program, authorizing SAP's €2.6 Billion Buyback as part of the broader initiative running through 2027. The move was further supported by insider confidence, with multiple executives purchasing company shares worth approximately €3.22 million during July.

Meanwhile, investor Harald Tschira increased his voting stake to 4.22%, reinforcing long term shareholder support.

Analysts Remain Divided

Wall Street and European analysts remain split on SAP's valuation. Some firms maintain bullish price targets above €210, citing strong cloud momentum and AI growth.

Others have lowered expectations following SAP's reduced operating profit guidance for 2026, pointing to acquisition related costs from Dremio and Prior Labs that are expected to pressure margins in the near term.

Technical Outlook

SAP shares have rebounded more than 11% from their recent lows but remain well below last year's record highs. Technical analysts see €175 as an important resistance level, while €153 serves as key support. A move above the 200 day moving average could strengthen bullish momentum.

"The overall program runs to €10 billion through the end of 2027; a signal management sees value in its own equity."

Business Fortune believes, the buyback announcement reflects the management's confidence even as SAP balances regulatory developments, AI expansion and a more cautious earnings outlook.

 

FAQs

What is SAP's €2.6 Billion Buyback?

It is the second phase of SAP's broader €10 billion share repurchase program, which will continue through 2027.

Why did Germany's cartel office close its inquiry?

The authority decided not to open formal proceedings into allegations regarding SAP's data access practices involving Celonis.

Why did SAP lower its 2026 profit forecast?

The company cited margin pressure from acquisitions such as Dremio and Prior Labs, despite strong cloud business growth.

How is SAP's cloud business performing?

Cloud revenue grew 22% year over year to €6.22 billion, while the cloud backlog increased to €22.9 billion.

What are analysts saying about SAP stock?

Analysts remain divided, with price targets ranging from €164 to €215, reflecting differing views on SAP's valuation and future earnings potential.