SAP SE

SAP's last five years have been defined by a multi-year cloud transition, a harsh 2020–2022 reset, and then a powerful recovery driven by cloud and AI enthusiasm, ending with the stock at 173.8 on 22 February 2026. Over this period the narrative shifted from "stalled legacy license vendor" to "cloud-led ERP and AI platform," with sentiment swinging around execution on cloud growth and margins.

2019–Early 2020: Late-cycle peak

From early 2019 into early 2020, SAP traded as a relatively steady large-cap software compounder, supported by solid maintenance revenue and growing demand for S/4HANA and cloud applications. Investor perception was that of a dependable but somewhat mature software name—not a hyper-growth story—with a focus on incremental margin improvement and steady dividends.

On the chart, shares moved in a broad uptrend into early 2020, making multi-year highs before the COVID shock, with pullbacks generally bought and volatility modest. The valuation premium to European cyclicals was justified by recurring revenue and limited direct exposure to industrial demand, which initially cushioned the stock during macro jitters before the pandemic hit.

2020: COVID shock and cloud reset

In Q1–Q2 2020, the COVID-19 crash drove a sharp drawdown as enterprise IT spending paused and investors de-risked across European equities. The bigger inflection came in October 2020, when SAP cut its mid-term outlook and accelerated the shift from traditional licenses to cloud, triggering one of the worst single-day declines in its modern history as investors reassessed growth and margin trajectories.

The narrative flipped almost overnight from defensive stalwart to "cloud transition pain story," with concerns about near-term margin compression and whether SAP was late versus US cloud leaders. Technically, the stock broke a long-standing support zone in late 2020, entering a new, lower trading range that marked the start of a multi-year base rather than a quick V-shaped recovery.

2021–2022: Transition drag and long base

Through 2021, SAP leaned into SaaS and RISE with SAP, emphasizing subscription growth and cloud backlog while license revenue remained under pressure. Earnings and guidance episodes in this period often featured good cloud KPIs but mixed total revenue and margin trends, keeping some investors skeptical about the speed and profitability of the transition.

Market perception evolved toward a "show-me" turnaround: structurally attractive ERP position, but execution risk and value-trap fears if cloud adoption or margin rebuild disappointed. On the chart, 2021–2022 were dominated by a wide sideways-to-down phase—repeated failures to sustain rallies, lower highs amid global tech de-rating, and retests of pandemic-era lows as rates rose and European risk assets de-rated.

2023–2024: Cloud and AI-driven rerating

By 2023, cloud revenue and backlog had become the core driver of the equity story, with S/4HANA Cloud and cloud ERP central to SAP's positioning. Investor focus shifted to KPIs like current cloud backlog, cloud ERP growth, and operating leverage, and as these strengthened, sentiment improved from cautious to increasingly optimistic on a durable, higher-quality growth profile.

In 2024, SAP reported strong cloud metrics: cloud revenue grew around mid-20s %, cloud ERP in the mid-30s %, and total revenue returned to double-digit growth while non-IFRS operating profit rose sharply. Management guided to accelerating cloud revenue growth into 2025 and highlighted AI as a demand driver, reinforcing a "cloud platform and Business AI beneficiary" narrative.

Technically, 2023 through mid-2025 formed a major bull phase: the stock broke out above the multi-year base, trended strongly higher, and ultimately printed an all-time high around 313 in 2025, significantly above prior peaks. Pullbacks during this run were mostly shallow consolidations, with investors buying dips on strong cloud KPIs and AI commentary, marking a clear rerating in the multiple.

Late 2025–Feb 2026: From euphoria to reset

After peaking near its all-time high in 2025, SAP entered a corrective phase as expectations for perpetual acceleration in cloud and AI-driven growth became harder to exceed. In early 2026, a negative cloud-related news shock drove an abrupt sell-off, with reports of weaker-than-expected cloud growth leading to SAP's largest single-day percentage drop since the 2020 guidance cut.

This episode shifted the narrative from "flawless cloud compounder" back to a more balanced view: still a strategic ERP and AI platform leader, but with renewed scrutiny on how sustainable the highest growth rates and margins are. Technically, the stock transitioned from a strong uptrend into a pronounced downtrend and then stabilization, with a deep drawdown from the 2025 high to significantly lower levels and subsequent trading around 173.8 on 22 February 2026—well below the prior peak but still meaningfully above the multi-year base lows.