SAP shares fall as UBS downgrades on AI monetization concerns

SAP shares fall as UBS downgrades on AI monetization concerns

Wed, August 26, 2026 at 9:26 PM GMT+3 1 min read

• SAP +4.48%

SAP (NYSE:SAP) faces a slower path to monetizing artificial intelligence, according to UBS, which downgraded the German software giant to Neutral from Buy on concerns that agentic AI is reaching customers too slowly.

The Swiss bank said SAP remains a dominant system of record with a deep moat around its core enterprise resource planning business, but the pace of "out-of-the-box" AI agent delivery is lagging. SAP has rolled out just 17 such agents to date, with another 15 in ramp-up, leaving its target of 200 by year-end looking difficult to reach, UBS analysts wrote.

The complexity of SAP's largest customers, many running multiple ERP instances across different versions and often on private cloud deployments with custom coding, complicates the company's ability to deliver standardized AI tools, according to the note. UBS said it is hearing positive signals on customers building their own agents through Joule Studio, but adoption remains gradual, making it hard to disprove bearish views on SAP's AI relevance in the near term.

UBS expects cloud backlog growth to decelerate in the second half of the year toward management's guided ~23% constant-currency pace, down from Q2's 26% (24.6% organic), a slowdown likely to pressure shares without clearer AI traction.

UBS also cited falling cloud gross, higher AI token costs pressuring R&D spending, a 100 million euro cut to 2026 EBIT guidance from acquisition dilution, and management's warnings about IT spending risks tied to the Gulf conflict.

UBS said it prefers Amadeus within the sector.

Shares of SAP were down 3.4% on Wednesday.