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SAP wiped €40 billion as slower cloud growth and backlog slowdown fueled concerns over enterprise cloud software and AI disruption in SaaS companies.
German software giant SAP fell as much as 17% on January 2026, after the company posted a SAP 2026 cloud forecast that was lower than market expectations. This marked SAP’s biggest one-day drop since 2020, wiping over €40 billion from its market value and raising concerns about enterprise cloud software growth.
SAP’s cloud business is expected to grow 23–25% in 2026, down from 26% growth in 2025. The company’s cloud backlog growth, which rose 30% last year to €77.3 billion, is forecasted to decelerate slightly due to longer sales cycles in large government and defense contracts. Despite this, SAP expects total revenue to grow faster through 2027 as more customers migrate to cloud-based offerings for enterprises. The company also announced a two-year buyback program worth up to €10 billion to support shareholder value.
“Cloud backlog and revenue growth are ultimately what investors are focused on,” said JPMorgan analysts. Citi analyst Balajee Tirupati added, “SAP needed an all-round acceleration to fight through sector sentiment; with puts and takes in the update, shares underperformed.” CFO Dominik Asam explained the slowdown is due to longer ramp-up times for big projects and rising sovereign cloud demand.
SAP temporarily topped Europe’s largest company by market cap in 2025 but has faced caution from investors amid concerns about AI disruption in SaaS companies. The broader software sector, including Dassault Systèmes, Sage, Salesforce, Adobe, and Datadog, also fell, reflecting a shift in investment toward semiconductors and AI-driven technology.
SAP’s cloud revenue jumped 26% in 2025 despite the market disappointment, and the adoption of SAP Business AI continues to drive growth. Investors will closely monitor SAP’s cloud execution and backlog updates in 2026 for indications of recovery in the enterprise cloud software market.
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