The stock has dropped 40% since the start of the year on concerns that artificial intelligence may entirely disrupt the software company's business model

SAP's stock climbed 6% in premarket trading in New York.

Shares of SAP rose on Friday after the company reported strong revenue growth in its cloud business, but analysts at Oppenheimer warn there are risks to its guidance.

The German software company said that its current cloud backlog - which is a key metric of the sales that management expects to achieve - grew 26% on a constant-currency basis to EUR22.93 billion (equivalent to $26.08 billion) in the second quarter, above analysts' forecasts of 24%.

SAP's stock $(SAP)$ climbed 6% in premarket trading in New York, after declining 40% since the start of the year as investors' concerns grew that artificial intelligence may entirely disrupt the company's business model.

"Customers are choosing SAP to enable accurate and compliant AI outcomes grounded in their most critical business processes and data," CEO Christian Klein said in a statement.

The company posted total revenue for the three months that ended June 30 of EUR9.88 billion, an increase of 11% from the same period last year and slightly higher than the Wall Street consensus of EUR9.85 billion.

However, SAP cut its outlook for the year, citing a EUR100 million impact from the acquisition of data platforms Prior Labs and Dremio. It trimmed its guidance for non-IFRS operating profit - referring to standards set by the International Accounting Standards Board - from a range of EUR11.9 billion to EUR12.3 billion to a range of EUR11.8 billion to EUR12.2 billion.

Brian Schwartz and Idan Gutkind at Oppenheimer said that while the company's cloud backlog continues to show growth, guidance risk is also increasing, as SAP currently assumes de-escalation in Iran. They added that there are concerns that big deal cycles could become longer in the second half of the year as AI spending rises.

Shares of rivals Oracle $(ORCL)$ and Microsoft $(MSFT)$ also advanced in premarket trading, climbing 2% and just over 1%, respectively.

-Nora Redmond

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July 24, 2026 09:43 ET (13:43 GMT)

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