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SAP Stock Plunges Amid AI Disruption Fears
22 Jan
Summary
- SAP shares hit their lowest point since August 2024.
- The company's market value has declined by approximately $130 billion.
- Analysts suggest SAP must accelerate its cloud transition to mitigate risks.
Shares of German software giant SAP have fallen to their lowest point since August 2024, continuing a months-long downtrend. This slide has eroded approximately $130 billion in market value since the company's record high in February 2025. The selloff is part of a wider market correction affecting software stocks in Europe and the United States, driven by growing apprehension over artificial intelligence potentially disrupting established business models.
Market watchers note that while SAP's fundamental future isn't in question, the valuation of its services faces pressure. Analysts suggest that AI could simplify the development and replication of software modules, potentially leading to lower average selling prices for services and reduced billable hours. SAP, which previously forecast full-year cloud revenue at the lower end of its guidance in October, is scheduled to announce its latest results next week.
Sentiment surrounding software stocks has been notably negative, with some analysts observing SAP's valuation approaching historical lows. While some traders are positioning for potential gains ahead of the upcoming results, technical indicators continue to signal further selling pressure. The broader S&P 500 software index has also experienced a significant decline in the current year.
