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The decline is mainly due to the figures from $IBM; it affects the entire sector.
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@jkb92 You're right there, IBM—20% is pretty steep. But actually, the sector has already been punished enough. And what does IBM have to do with SAP, anyway? Their businesses only overlap to a very limited extent. Plus, IBM hit its all-time high (ATH) in June, so the pullback is steep, but from a different level. SAP is already more than 50% below its ATH.
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@IronEagle Think of it as an opportunity—I've put in a little more, too.
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@IronEagle IBM said during the call that they were noticing customers were spending less money on SaaS and that AI was taking center stage. That's why. We'll see.
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@Barrd Yes, but that's because customers see that memory chips are getting more and more expensive, so they'd rather make the investment now than wait any longer. So it could also be a temporary effect.
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•@jkb92 What gives you hope? That there will be another flash in the pan like the one in early June 2026? SaaS does indeed seem to be less in demand, and that’s now reflected in the numbers (at least at IBM). SAP has a 2026 P/E ratio of (currently) 20. If the numbers turn out to be worse, we’ll be in a range that’s absolutely no longer justified given the lack of growth. I think SAP is like VW in the auto industry. Things are going wrong both for the sector and for the company itself.
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@IronEagle I don't think this is really optional for the average SAP customer.
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•20H
The market reaction actually suggests that this has more or less already been priced in and that there isn't much room left for software stocks to fall.
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@jkb92 Do you like these "fallen angels" in the software or consulting industry? :-) Isn't the market generally driven more by momentum? This bet can pay off—as with Bayer or EON, for example—but it can also go wrong, as with auto stocks. Or you need to have the patience to hold on for the long haul and end up missing out on many other opportunities in the meantime. When SAP starts climbing again (too bad I was too hesitant to sell everything while on vacation in early June), I’ll continue to reduce my position.
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@IronEagle I’ve picked up a few stocks recently. I believe that AI is bringing about change, but not necessarily for the worse in every area—and certainly not to the extent suggested by the sell-off—which, in my opinion, presents good long-term opportunities. The narrative changes so quickly. Just over a year ago, no one would touch semiconductor stocks. Back then, there were apparently also “reasons” why it wasn’t a good long-term investment.
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