Investing.com — stock fell 4.5% in pre-open trading today after Goldman Sachs lowered its price target on the German enterprise software giant to $265 from $271, while maintaining a Buy rating.
The move comes as the Wall Street bank trimmed its margin forecasts for the German software giant amid expectations of higher hardware costs in the second half of the year.
The bank made no changes to its organic current cloud backlog growth assumptions of 23.5% year-over-year for Q2 2026, but the target and margin outlook cut — arriving ahead of the company’s next scheduled earnings release on July 23 — removed a near-term positive catalyst and prompted pre-market selling pressure.
The analyst action compounds a broader overhang that has weighed on SAP shares since late January 2026, when the company’s cloud backlog growth came in slightly below analyst expectations and management signaled a modest deceleration in that metric for the full year, triggering a sharp valuation reset.
More recently, SAP shed nearly 5% on June 3 as investors continued to reassess the pace of cloud and AI revenue conversion, with concerns around slower-than-expected enterprise migration to consumption-based pricing and intensifying competition at the AI agent layer adding to the cautious tone.
The macro environment added further pressure today. Goldman Sachs pushed its Federal Reserve rate-cut forecast entirely out of 2026 and into 2027, citing stronger-than-expected labor market data — a development that raises the discount rate applied to high-multiple growth stocks like SAP.
The declined 1.0% and the slipped 0.3%, reflecting a broad rotation away from premium-valued technology names, while the edged marginally higher.
SAP’s key enterprise software peers — including and — have also faced recurring pressure in this environment as investors scrutinize AI monetization timelines across the sector.
Together, the Goldman Sachs target cut, the delayed rate-cut outlook, and the residual cloud growth skepticism created a confluence of selling pressure that pushed SAP to $170.80 in pre-market — well below its previous session level of $178.92 and still a significant distance from its 52-week high of $313.28, underscoring how much ground the stock has yet to recover since its late-2025 peak.
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