FRANKFURT (Reuters) – SAP shares fell as much as 4.7% on Wednesday, extending a two-day retreat driven by a downgrade from UBS and renewed caution over U.S. software sector outlooks.
The German enterprise software leader, which had surged nearly 50% over the prior four weeks, saw its shares trade 3.7% lower by mid-afternoon at €178.60, approaching the 21-day moving average that had capped gains for a month. The pullback trimmed some of the recent gains in the DAX index, where SAP carries significant weight.
UBS analyst Michael Briest maintained a cautious stance on SAP despite acknowledging the company’s core role in enterprise software architecture. Briest lowered his rating to Neutral from Buy, citing a lack of immediate catalysts tied to artificial intelligence and a slow integration of agentic AI capabilities. He also warned of a likely deceleration in the Current Cloud Backlog (CCB)—the pipeline of contracted cloud revenues—during the second half of the year, which could pressure monetization and increase the risk of customers seeking alternative AI solutions.
The broader software sector faced renewed pressure in the U.S., where shares of Intuit, Zoom Communications and Adobe each declined by up to 2.4%. The declines followed a mixed earnings season and heightened regulatory scrutiny in the sector. Oracle bucked the trend, rising 1.1% in pre-market New York trading after Citigroup analyst Tyler Radke assigned the stock a "Positive Catalyst Watch" status, reflecting expectations of supportive drivers over the next 90 days. Oracle’s shares had earlier touched a low not seen since May 2024 in July.
SAP’s recent rebound had been fueled by optimism around enterprise AI adoption, following a prolonged period of underperformance linked to concerns over AI’s disruptive potential. The latest retreat underscores the fragility of investor sentiment in the face of shifting sector dynamics and valuation concerns.
