Live Markets: Bye-bye SaaSpocalypse? SAP charts turn bullish ahead of earnings

SAP SE

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BYE-BYE SAASPOCALYPSE? SAP CHARTS TURN BULLISH AHEAD OF EARNINGS
SAP's SAPG.DE chart is sending a more positive signal ahead of quarterly results tomorrow, a stark contrast to the beginning of the year when concerns over AI disruption sparked a "SaaSpocalypse" selloff that erased nearly $1 trillion.
Europe's largest software group has staged an impressive recovery. Its shares are up around 60% from their summer lows and are now trading above both their 20-day and 200-day moving averages. It recently broke through the key €200 level for the first time since before the selloff.
The turnaround contrasts with the broader tech sector. 
While the chip complex and other AI trades have struggled in recent weeks on concerns over the cost of financing and the sustainability of the investment boom, software has proved a relatively resilient corner of the market.
That resilience will be tested when SAP reports third-quarter results, after the Wall Street close.
Analysts expect a solid quarter. Jefferies sees cloud backlog growth of about 25%, slightly ahead of consensus, and expects a return to margin growth after higher AI-related spending squeezed profitability in the second quarter.
"As SAP starts to prove out its agent capabilities, we expect the SaaSpocalypse narrative to fade and for the re-rating to continue," analysts including Charles Brennan wrote.
     
(Danilo Masoni)
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