TLDR

• UBS downgraded SAP from Buy to Neutral and raised its price target to EUR201 from EUR164
• Analyst Michael Briest said SAP is delivering agentic AI to customers too slowly
• SAP has shipped 17 out-of-the-box AI agents, with a goal of 200 by year-end looking difficult
• SAP’s American depositary receipts fell more than 2% in early trading and are down about 13% in 2026
• UBS expects 19% earnings CAGR through 2028 but sees likely deceleration in cloud backlog growth in the second half

SAP shares fell on Wednesday after UBS cut its rating on SAP SE from Buy to Neutral, citing a lack of near-term AI catalysts.

Analyst Michael Briest raised his price target to EUR201 from EUR164, but said SAP is “only delivering agentic AI into customers’ hands slowly.” He argued that the pace is limiting how much revenue SAP can generate from AI and is encouraging some customers to build their own AI solutions in the meantime.

SAP’s American depositary receipts were down more than 2% in early trading on Wednesday. The stock is down around 13% in 2026.

UBS said SAP has delivered 17 out-of-the-box AI agents so far, with another 15 in ramp-up phase. The bank said the company’s target of 200 agents by the end of the year is starting to look like a stretch.

Briest pointed to SAP’s customer base as part of the challenge. Many of the company’s largest enterprise clients run multiple ERP instances across different versions, often on private clouds and with custom coding. That, UBS said, makes it harder for SAP to deploy ready-made AI solutions at scale, even as enterprises look for ways to add automation without rebuilding core systems.

According to InvestingPro data, four analysts have also lowered earnings estimates for the upcoming period. SAP is currently trading at a P/E ratio of 27.86, which UBS said looks high relative to near-term earnings growth expectations.

Cloud Growth and Free Cash Flow Under Pressure

UBS still expects SAP to deliver 19% compound annual earnings growth through 2028, supported by the RISE migration cycle. Even so, the firm warned that cloud backlog growth is likely to slow in the second half of the year, a key measure for software investors because it can signal how much future subscription revenue is already in the pipeline.

The bank also said free cash flow upside looks less likely this year than in the past two years. UBS pointed to signs that the use of migration credits is weighing on cash generation.

SAP was not the only software name under pressure on Wednesday.

Software Sector Feels the Pressure

Zoom Communications fell more than 5% in early trading after its guidance disappointed investors. Benchmark analyst Matthew Harrigan pointed to “unanticipated slowing Online activity” while maintaining a Buy rating.

Intuit declined about 2% after its fiscal fourth-quarter results late Tuesday. The stock is down close to 50% this year. Although earnings beat expectations, the company’s revenue guidance of 9% to 10% growth for the year was well below last year’s 14%.

Intuit CEO Sasan Goodarzi said the company is focused on gaining market share and accelerating customer growth. “I’m resetting expectations for the company because this is the perfect time to do it, where we can play offense,” he said on the earnings call.

Salesforce, Okta, and Nutanix were all scheduled to report after the close on Wednesday.

SAP’s second-quarter cloud growth came in at 24%, in line with expectations, while current cloud backlog growth of 26% beat forecasts. Even so, operating income missed Wall Street estimates, partly because of merger and acquisition costs.

After SAP’s Q2 results, Bernstein SocGen and TD Cowen both lowered their price targets while keeping positive ratings. BMO Capital raised its target slightly, and Oppenheimer maintained its Perform rating.