SAP Shares Plunge to Fresh Low, Down 20% Year-to-Date Amid AI Disruption Fears

SAP SE shares (ETR:SAP) tumbled 3.2% to €161.66 during morning trading, marking yet another painful session for Europe's largest software company as investors continue to flee the stock amid mounting concerns over artificial intelligence disruption and disappointing cloud performance.

The share price touched a new intraday low of €159.60, extending a brutal selloff that has now erased 20% of shareholder value since the start of the year and 40% over the past twelve months.

The German enterprise software giant has found itself caught in a perfect storm of negative sentiment that has battered European technology names in recent weeks. Markets have grown increasingly anxious that rapid advances in artificial intelligence could fundamentally undermine the competitive moats that have long protected traditional software businesses, raising existential questions about SAP's pricing power and market position in an AI-dominated future.

The latest downturn follows a catastrophic trading session on 29 January 2026, when SAP reported current cloud backlog growth of just 16% year-over-year to €21.1 billion, falling dramatically short of the 26% expansion markets had anticipated. The miss triggered a 15% single-day collapse in the share price, representing the steepest decline since October 2020 and wiping billions off the company's market capitalisation in a matter of hours.

SAP attributed the disappointing backlog performance to an unexpectedly high volume of large transformational deals, which typically generate slower initial revenue recognition, and an increase in government contracts containing termination for convenience clauses. These government agreements, while potentially lucrative, are excluded from current cloud backlog calculations due to their cancellable nature, creating an accounting headwind that obscured underlying demand trends.

The cloud backlog shortfall has proven particularly damaging to investor confidence given SAP's strategic pivot toward subscription-based cloud services as its primary growth engine. Markets had been pricing in robust cloud momentum to justify premium valuations, and the sudden deceleration has forced a painful reassessment of the company's near-term trajectory and competitive positioning against nimbler cloud-native rivals.

Broader market turbulence has compounded SAP's woes. The 20 January 2026 U.S. market crash, sparked by tariff threats against European nations, sent shockwaves through global equity markets and triggered heightened volatility across technology sectors. The resulting flight to safety and risk-off positioning has disproportionately impacted growth-oriented software names, with SAP bearing the brunt of European tech weakness.

With few near-term catalysts capable of disproving AI disruption concerns, technical pressure appears set to continue unless fundamental performance demonstrates unexpected resilience. The company's ability to stabilise cloud backlog growth and articulate a compelling AI strategy will prove critical in determining whether current price levels represent capitulation or merely another leg down in a prolonged bear market.