On July 29, SAP SE rose 3.14% in regular trading, trading at 185.25 USD/share, with turnover of $235 million. The stock continues its rebound trajectory driven by strong Q2 cloud business results and a broader SaaS sector recovery.

On the earnings front, SAP reported Q2 cloud revenue growth of 22% year-over-year, with cloud backlog reaching 22.929 billion euros, up 27%. Total revenue of 9.878 billion euros slightly exceeded consensus estimates, while IFRS net income surged 26%. Although non-IFRS EPS of 1.59 euros missed the 1.75-euro estimate, the accelerating cloud growth momentum remained the dominant narrative.

The broader SaaS sector provided additional tailwinds after Morgan Stanley issued a report stating that prior pessimism toward software stocks was excessive, maintaining a positive rating on the sector. On July 28, the SaaS sector rallied broadly with funds rotating from semiconductor stocks into software names, lifting SAP over 6% in a single session. With SAP shares having declined approximately 35% year-to-date amid multiple analyst target price cuts, the earnings release catalyzed sustained sentiment recovery from deeply oversold levels.

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