SAP shares slide sharply after cloud growth misses expectations in Q4

Investor confidence in SAP took a hit on Thursday after the company reported weaker growth in its cloud business than markets had anticipated. The German software major saw its shares fall sharply following the release of its fourth quarter numbers.

SAP stock dropped by as much as 11% during the session, marking its steepest single day decline since October 2020. At that time, the shares had fallen 22% after disappointing quarterly earnings. The stock is now heading toward its lowest closing level since mid 2024, reflecting growing concerns around its cloud momentum.

At the time of the latest update, SAP shares were trading lower by 9.7%. The sell off followed news that the company’s current cloud contract backlog rose by 16% in the fourth quarter, reaching 21.1 billion euros, or $25.3 billion. While the increase showed continued growth, it fell short of market expectations.

Chief Executive Officer Christian Klein had earlier indicated that the company was aiming for cloud backlog growth of 26%, according to a report. The gap between the target and the reported figure appears to have unsettled investors, who are closely tracking SAP’s transition toward cloud based revenue as a key driver of its long term strategy.