Shares of SAP surged as much as 4.3% to $178.40 on July 28 after the German software giant launched a €2.6 billion share buyback tranche, the latest and largest slice of a €10 billion repurchase program running through 2027. The move, landing days after a strong second-quarter earnings report, signals management's confidence that its stock — already up roughly 22% from last week's levels — still has room to run. SAP Launches Its Biggest Buyback Tranche Yet — But Is €10 Billion Enough to Prove the Stock Is Cheap?
Shares jumped 4.3% to $178.40 after SAP kicked off the second €2.6 billion tranche of its sweeping €10 billion share repurchase program, layering fresh demand onto a stock already rallying from a strong earnings week. The new tranche, running from July 27, 2026 through January 27, 2027, authorizes purchases of up to €2.6 billion on the Frankfurt exchange. For investors, the signal is straightforward: management believes its own stock is underpriced — and is willing to spend billions to prove it.
• The First Tranche Already Bought Shares at Far Higher Prices
SAP repurchased roughly 16.3 million shares in the first tranche at an average cost of €161.16 — well above the recent lows near €131. At the July 24 closing price of €140.20, the new tranche could retire up to 18.5 million shares, or about 1.5% of the share capital. In plain terms, each euro now buys more stock than before, making this round of buybacks far more efficient at shrinking the number of shares outstanding and boosting per-share earnings.
• Quarterly Earnings Gave Management Cover to Spend Aggressively
Q2 total revenue rose 9% to €9.9 billion, cloud revenue grew 22% to €6.3 billion, and basic earnings per share climbed 30% to €1.89.
Free cash flow surged to €3.0 billion in the quarter , while full-year free cash flow guidance of approximately €10 billion was reiterated . That cash pile is what funds the buyback without forcing SAP to borrow — a luxury many rivals lack.
• AI Deals Are Driving Cloud Growth, but Costing Margins Near-Term
AI and SAP's business data platform appeared in more than 90% of its 50 largest deals , showing the technology is already a sales closer. But SAP's recent acquisitions prompted a €100 million-plus trim to the full-year operating profit outlook, now €11.8–12.2 billion . Investors are tolerating the trade-off — spending on AI tools today to lock in subscription revenue for years.
• The Stock Has Bounced Hard, Yet Analysts See More Upside SAP has surged roughly 22% from its July 22 close of $146.38 in under a week, but the average analyst price target of €221.25 still implies roughly 60% upside from recent levels. The combination of a shrinking share count, accelerating cloud backlog, and a €10 billion buyback backstop gives bulls a clear thesis — provided the global macro backdrop cooperates.