Siemens tops German market value after SAP's sharp decline

12:50

By: Dakir Madiha

Siemens tops German market value after SAP's sharp decline

Siemens AG has overtaken SAP SE to become Germany's most valuable listed company, following a steep sell-off in the software giant's shares triggered by investor disappointment over its 2026 cloud outlook. SAP's stock plunged as much as 17 percent in session trading, trimming its market capitalization to around 199 billion euros ($241 billion), per Bloomberg data. This shift underscores how even profitable enterprise software leaders face volatile valuations when cloud growth projections fall short.

The heavy selling followed SAP's forecast of 23 to 25 percent revenue growth in its cloud business for 2026, coupled with a slight slowdown in its closely watched "current cloud backlog"—a key metric tied to expected revenue from contracts signed in the coming year. The stock headed for its biggest one-day drop since 2020, with markets fixating on the pace and timing of cloud expansion rather than overall financial results. SAP executives attributed short-term backlog perceptions to contract mix: larger transformation deals ramping up later, and more sovereign cloud and public sector agreements with termination clauses that limit backlog recognition. The company also unveiled a new share buyback program worth up to 10 billion euros.

SAP's repositioning has fueled broader risk aversion in the software sector, as investors question whether AI tools could erode demand for traditional applications or squeeze pricing power industry-wide. U.S. tech stocks dipped too, after SAP's guidance and a post-earnings slide for ServiceNow, heightening concerns over intensifying AI competition. The episode highlights how swiftly market sentiment can turn: while many firms tout AI as a growth driver, scrutiny grows on whether it might make certain enterprise software categories easier to replicate or less essential over time.