Story
SAP Stock Surges as Company Activates €2.6 Billion Share Buyback
Summary
Shares of the German software giant gained over 5% as it launched the second part of its major share repurchase program, amplifying positive momentum from strong recent Q2 cloud earnings.
SAP SE (ETR: SAPG) shares surged more than 5% on Thursday, driven by the dual catalysts of a major corporate buyback program and sustained investor confidence following strong quarterly results released earlier in the week.
Buyback and Earnings Momentum
The primary driver for the session's rally was the activation of the second tranche of SAP's share repurchase program. The company announced it could begin buying back shares at market open, with a total volume of up to €2.6 billion authorized through January 2027. This action is part of a larger €10 billion buyback plan originally announced in January 2026.
The move amplifies positive sentiment from SAP's second-quarter 2026 earnings report. The results, which were seen as better than feared, helped alleviate investor anxiety and have supported the stock's recovery from its lows in the prior week.
Strong Cloud Performance
SAP's recent financial performance has been underpinned by robust growth in its cloud business. The company reported several strong key metrics for the second quarter:
Ad- Current cloud backlog grew 27% to €22.9 billion.
- Cloud revenue increased by 22%.
- Cloud ERP Suite revenue saw a 25% rise.
Overall, SAP reported Q2 earnings per share of €1.59 on revenue of €9.88 billion. Management reaffirmed its full-year 2026 cloud revenue forecast of €25.8–€26.2 billion, signaling continued confidence in its strategic direction despite slightly trimming non-IFRS profit guidance to account for recent acquisitions.
Market Context
SAP's stock was among the top performers in Germany's DAX 40 index. The rally was also supported by a constructive global market environment, with U.S. indices also advancing. Analyst sentiment remains broadly positive, with BMO raising its price target to $177 and other firms like TD Cowen and Barclays maintaining positive ratings. A reported insider stock purchase on July 25 further added to the signals of internal confidence in the company's trajectory.
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