SAP Should I Buy
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SAP is not a strong buy at the moment for a beginner investor with a long-term horizon. Despite solid financial performance in Q4 2025, the technical indicators are bearish, and the options data suggests cautious sentiment. Analysts have mixed views with recent price target reductions, and there are no strong catalysts to suggest immediate upside potential. Holding or waiting for a clearer entry point is recommended.
The technical indicators are bearish. The MACD histogram is negative and contracting, RSI is neutral at 41.418, and moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). Key support is at 192.824, and resistance is at 210.976. The stock is trading near its pivot level of 201.9.
SAP is expanding its partnership with Cohere to launch sovereign AI solutions globally, which could enhance its offerings in the public sector. The company's Q4 2025 financials showed strong revenue, net income, and EPS growth.
Analysts have recently lowered price targets, citing disappointing Q4 results and slower cloud backlog growth. The gross margin dropped slightly YoY, and there is no significant hedge fund or insider activity. Broader software sector sentiment remains pessimistic.
SAP's Q4 2025 financials were strong with revenue up 12.71% YoY, net income up 25.85% YoY, and EPS up 27.78% YoY. However, gross margin dropped slightly to 73.54%, down -1.09% YoY.
Analysts have mixed views. Grupo Santander upgraded SAP to Neutral with a EUR 193 price target. Piper Sandler and Barclays kept Overweight ratings but lowered price targets. Several firms, including BMO Capital, Deutsche Bank, and JPMorgan, also lowered price targets but maintained positive ratings. Citizens downgraded the stock to Market Perform, citing disappointing Q4 results and slower growth in key areas.
