The decline comes amid a broader selloff affecting software stocks in both Europe and the United States, driven by growing investor concerns about AI disruption. Despite the pullback, most analysts remain optimistic about Europe’s largest software company.
By 1334 GMT, SAP shares were down 2.4% in Frankfurt, valuing the company at about €233 billion ($273 billion), compared with a peak valuation of €344 billion at its lifetime high in February 2025.
Market observers say the selloff reflects mounting unease over the potential impact of AI on SAP’s services business. “Some of the concerns in the market are justified, not about the company’s existential future, but about the value of its services,” said Angelo Meda, portfolio manager at Banor SIM. He added that SAP must accelerate its transition to cloud-based offerings.
“With AI, many modules can become easier to develop and replicate, so the risk is that the average selling price of services and billable hours falls,” Meda said.
SAP’s cloud revenue outlook has already shown signs of pressure. In October, the company forecast full-year cloud revenue at the lower end of its guidance range, though it still expected operating profit to be near the upper end. SAP is due to report its latest results next week.
Investor sentiment toward software stocks has weakened sharply. Jefferies analyst Brent Thill noted in a Monday note that “software sentiment has rarely been lower,” adding that SAP’s valuation is approaching its historical trough.
Some traders in Frankfurt said clients were positioning for next week’s results, but technical indicators still pointed to further downside. The S&P 500 software index has fallen 7.2% so far in 2026, underscoring the wider pressure on the sector.