Like the major players in the software sector, SAP shares have corrected sharply on the stock market since spring 2025. The major stocks in this sector are facing unfavorable capital arbitrage as flows are shifting toward the AI sector. Historically pure and already very mature software companies have therefore seen capital outflows as investors reposition into stocks fully exposed to AI growth. However, software companies such as Adobe or SAP remain highly profitable and are starting to implement solid strategies to monetize AI.
Last week, I reviewed the case of Adobe stock. Today, I am asking the same question for SAP shares: after a 45% drop in a few months, should one consider repositioning on the buy side for SAP stock?
Financial market technical analysis and fundamental valuation analysis suggest that caution and patience are still warranted:
• The real tangible support zone is rather located between €130 and €150 per share
• From a valuation standpoint, SAP’s drop is not yet a fundamental opportunity in the same way as Adobe
From a technical perspective, SAP’s monthly chart shows that the €170 area has now become an intermediate resistance, corresponding to a former support that has turned into a distribution zone. The stock experienced a very rapid bullish acceleration before correcting sharply, which often leaves room for prolonged consolidation phases. In this type of setup, it is common for the market to test deeper retracement areas before considering a sustainable recovery. The technical levels between €130 and €150 correspond to previous congestion zones and more credible Fibonacci retracement levels to build a medium-term entry point with a better risk/reward ratio.
From a fundamental standpoint, valuation remains demanding despite the correction. By comparison, Adobe is trading at significantly lower earnings multiples, while its growth momentum remains solid and its cash generation capacity is comparable. For its part, SAP retains a strong strategic positioning in enterprise software, with a captive customer base and recurring revenues, but the market is already pricing in a good portion of the future benefits linked to the integration of AI into its solutions. In other words, SAP’s valuation premium remains partly justified by its quality, but it mechanically limits short-term re-rating potential.
Finally, in a context of sector rotation that remains favorable to stocks directly exposed to AI, large “historical” software names continue to suffer from a relative attractiveness deficit compared with tech giants such as Microsoft. For a long-term investor, SAP remains a high-quality name to watch closely, but entry discipline is essential. A gradual, step-by-step approach on lower technical zones would allow repositioning with a greater margin of safety, rather than trying to catch an uncertain bottom.
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This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions.
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Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results.
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Last week, I reviewed the case of Adobe stock. Today, I am asking the same question for SAP shares: after a 45% drop in a few months, should one consider repositioning on the buy side for SAP stock?
Financial market technical analysis and fundamental valuation analysis suggest that caution and patience are still warranted:
• The real tangible support zone is rather located between €130 and €150 per share
• From a valuation standpoint, SAP’s drop is not yet a fundamental opportunity in the same way as Adobe
From a technical perspective, SAP’s monthly chart shows that the €170 area has now become an intermediate resistance, corresponding to a former support that has turned into a distribution zone. The stock experienced a very rapid bullish acceleration before correcting sharply, which often leaves room for prolonged consolidation phases. In this type of setup, it is common for the market to test deeper retracement areas before considering a sustainable recovery. The technical levels between €130 and €150 correspond to previous congestion zones and more credible Fibonacci retracement levels to build a medium-term entry point with a better risk/reward ratio.
From a fundamental standpoint, valuation remains demanding despite the correction. By comparison, Adobe is trading at significantly lower earnings multiples, while its growth momentum remains solid and its cash generation capacity is comparable. For its part, SAP retains a strong strategic positioning in enterprise software, with a captive customer base and recurring revenues, but the market is already pricing in a good portion of the future benefits linked to the integration of AI into its solutions. In other words, SAP’s valuation premium remains partly justified by its quality, but it mechanically limits short-term re-rating potential.
Finally, in a context of sector rotation that remains favorable to stocks directly exposed to AI, large “historical” software names continue to suffer from a relative attractiveness deficit compared with tech giants such as Microsoft. For a long-term investor, SAP remains a high-quality name to watch closely, but entry discipline is essential. A gradual, step-by-step approach on lower technical zones would allow repositioning with a greater margin of safety, rather than trying to catch an uncertain bottom.
DISCLAIMER:
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions.
This content is not intended to manipulate the market or encourage any specific financial behavior.
Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results.
Swissquote and its employees and representatives shall in no event be held liable for any damages or losses arising directly or indirectly from decisions made on the basis of this content.
The use of any third-party brands or trademarks is for information only and does not imply endorsement by Swissquote, or that the trademark owner has authorised Swissquote to promote its products or services.
Swissquote is the marketing brand for the activities of Swissquote Bank Ltd (Switzerland) regulated by FINMA, Swissquote Capital Markets Limited regulated by CySEC (Cyprus), Swissquote Bank Europe SA (Luxembourg) regulated by the CSSF, Swissquote Ltd (UK) regulated by the FCA, Swissquote Financial Services (Malta) Ltd regulated by the Malta Financial Services Authority, Swissquote MEA Ltd. (UAE) regulated by the Dubai Financial Services Authority, Swissquote Pte Ltd (Singapore) regulated by the Monetary Authority of Singapore, Swissquote Asia Limited (Hong Kong) licensed by the Hong Kong Securities and Futures Commission (SFC) and Swissquote South Africa (Pty) Ltd supervised by the FSCA.
Products and services of Swissquote are only intended for those permitted to receive them under local law.
All investments carry a degree of risk. The risk of loss in trading or holding financial instruments can be substantial. The value of financial instruments, including but not limited to stocks, bonds, cryptocurrencies, and other assets, can fluctuate both upwards and downwards. There is a significant risk of financial loss when buying, selling, holding, staking, or investing in these instruments. SQBE makes no recommendations regarding any specific investment, transaction, or the use of any particular investment strategy.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts suffer capital losses when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Digital Assets are unregulated in most countries and consumer protection rules may not apply. As highly volatile speculative investments, Digital Assets are not suitable for investors without a high-risk tolerance. Make sure you understand each Digital Asset before you trade.
Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainties.
The use of Internet-based systems can involve high risks, including, but not limited to, fraud, cyber-attacks, network and communication failures, as well as identity theft and phishing attacks related to crypto-assets.
This content is written by Vincent Ganne for Swissquote.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
This content is written by Vincent Ganne for Swissquote.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.