SAP

SAP sells enterprise resource planning (ERP) software. Companies use this software to run finance, supply chain, and other core operations. SAP used to sell this software as a one-time license. SAP now sells most of it as a cloud subscription.

Cloud revenue was 57% of total revenue in 2025 and 63% in the first half of 2026. SAP prices its main cloud ERP product by a weighted count of users, called Full Use Equivalents. The main cloud product is S/4HANA Cloud, sold as RISE to existing customers and GROW to new customers.

Investors fear that AI agents will let companies cut the paid users SAP's cloud software is priced around, and that AI tools will take work away from classic business software. A miss in the cloud backlog on January 29, 2026 started a sharp SAP selloff, and this fear kept the price down for most of the first half of 2026. SAP answered in April 2026 with a new API policy. The policy does not let outside AI systems plan and run their own sequences of calls against SAP data, except through tools SAP supplies, such as Joule and Business Data Cloud.

The gap can close if SAP keeps posting strong cloud growth without leaning only on user counts. In the second quarter of 2026, cloud revenue grew 24% at constant currency and the current cloud backlog grew 26% at constant currency. That is evidence growth had not yet slowed the way the user-count fear implies. DSAG, the German-speaking SAP user group, criticized the API policy for unclear terms.

So the policy is not yet proven, and it could draw more customer or regulatory pushback instead of new revenue. Mainstream maintenance for SAP ECC ends on December 31, 2027, so many legacy on-premises customers must decide whether to move to the new cloud product. That decision will show whether the lock-in argument holds up. The next check comes at Q3 2026 earnings on October 21, 2026.

A fuller picture is likely over the next two to four quarters, as the API policy and the 2027 upgrade cycle play out.

1. Oct 21, 2026Pending

   Q3 2026 results: cloud growth and cloud backlogCloud revenue growth near 24% at constant currency and current cloud backlog growth near 25% or more pass; a clear slowdown in backlog growth or lower cloud guidance fails.
2. Jan 2027 · est.Pending

   Full-year 2026 results and 2027 outlookA 2027 outlook with cloud growth that stays above 20% and growing AI revenue passes; lower cloud guidance tied to fewer user seats fails.
3. Dec 31, 2027Pending

   End of mainstream maintenance for SAP ECC customersMost large legacy customers that sign cloud contracts with SAP before this date pass; many customers that move to third-party support or rivals fail.

Every passed and failed checkpoint across all picks

SAP reports in euros and has more cash than debt. Its debt is almost all Eurobonds (nominal €8.05 billion), plus €500 million of commercial paper, and SAP has no bank loans. Read more

• SAP prices its main cloud ERP product by a weighted count of users. If AI agents cut a customer's headcount, SAP's revenue from that customer can fall at renewal.
• Mainstream maintenance for SAP ECC ends on December 31, 2027. Many older customers must decide whether to upgrade to the new cloud product, pay for extended maintenance to 2030, or leave. This can bring more revenue, or push some customers to a competitor or to third-party support instead.
• SAP's April 2026 API policy has drawn public criticism from DSAG, the German-speaking SAP user group, over unclear terms and unclear coverage. Analysts warn it can raise customer lock-in and integration cost. If the backlash grows, it could slow adoption of Joule or invite regulatory scrutiny, which would weaken the case that the policy strengthens SAP's moat.
• SAP does not publish user-count data. This makes it hard to confirm whether the risk above is already happening.
• Germany withholds 26.375% of SAP's dividend. A US holder can claim back part of it under the US-German tax treaty, down to 15%. In a taxable account, the 15% is usually a credit against US tax. In a tax-deferred account such as an IRA, that tax is lost.

• October 6, 2026SAP agreed to buy TechWolf, an AI company that maps the skills and work of large workforces. TechWolf will become a core part of SAP SuccessFactors. SAP did not disclose the price and expects the deal to close in Q4 2026, after regulatory approval.
• October 6, 2026At SAP Connect, SAP started the customer rollout of Joule Work, an AI interface that works across SAP and outside data. SAP also launched SAP Pay, a payments service inside SAP Cloud ERP, now available in the US and the UK.
• August 26, 2026UBS lowered its rating on SAP from Buy to Neutral and raised its price target to €201. The stock had risen almost 50% in about four weeks after its July low.