SAP Stock Plunges After Cloud Contract Growth Disappoints

German software giant's cloud backlog growth falls short of expectations, sparking market turmoil

Apr. 10, 2026 at 7:03am

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A highly polished, geometric metal sculpture or abstract object representing cloud computing and software as a service, floating on a clean, monochromatic background and dramatically lit to symbolize the volatility and uncertainty in the software industry.As SAP's cloud contract growth disappoints, the company's future competitiveness in the rapidly evolving tech landscape remains uncertain.Today in Pittsburgh

SAP, the renowned German software company, saw its stock price plunge 14% on Thursday after reporting disappointing growth in its cloud contract backlog during the fourth quarter. The cloud backlog, valued at €21.1 billion, grew by 16%, falling short of analysts' expectations of a 26% surge. SAP attributed the slowdown to large-scale transformation deals and legal clauses. Despite the setback, CEO Christian Klein remains optimistic, citing the current cloud backlog as a strong foundation for future revenue growth. However, the company anticipates a slight deceleration in cloud backlog growth in 2026.

Why it matters

SAP's transition from on-premises software licenses to cloud services has been a strategic move, but the AI boom has investors concerned about legacy software providers' ability to adapt. The company's cloud contract growth slowdown has sparked market turmoil, raising questions about SAP's competitiveness in the rapidly evolving technology landscape.

The details

SAP's total revenue for the fourth quarter rose to €9.7 billion, a modest increase from €9.4 billion in the same period last year. Operating profit also saw a boost, climbing to €2.6 billion from €2 billion. However, the company's cloud contract backlog growth of 16% fell short of UBS analysts' expectations of a 26% surge. SAP attributed this slowdown to large-scale transformation deals and legal clauses, which impacted the growth by approximately 1 percentage point.

  • SAP's stock price plunged 14% on Thursday, April 10, 2026.
  • The company's cloud contract backlog was valued at €21.1 billion ($25.3 billion) in the fourth quarter of 2026.

The players

Christian Klein

SAP's CEO, who remains optimistic about the company's cloud backlog as a strong foundation for future revenue growth.

Dominik Asam

SAP's CFO, who raised concerns about the impact of the AI boom on legacy software providers and the need for SAP to swiftly adopt AI technologies within its R&D portfolio.

UBS

An investment bank whose analysts expected a 26% surge in SAP's cloud contract backlog growth, but the actual growth was 16%.

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What they’re saying

“Will customers now be able to do everything themselves, shrinking the market pie?”

— Dominik Asam, CFO, SAP

What’s next

SAP's CEO, Christian Klein, has expressed optimism about the company's cloud backlog as a strong foundation for future revenue growth. However, the company anticipates a slight deceleration in cloud backlog growth in 2026, which will be closely watched by investors and analysts.

The takeaway

SAP's cloud contract growth slowdown has sparked market turmoil, raising concerns about the company's ability to adapt to the rapidly evolving technology landscape, particularly the impact of the AI boom. The company's transition to cloud services has been a strategic move, but it now faces the challenge of maintaining its competitive edge by swiftly adopting AI technologies within its R&D portfolio.