SAP bullish thesis: undervalued due to market sentiment

What happened: Shares of SAP SE (SAP) entered oversold territory on June 29, with a Relative Strength Index (RSI) of 29.9, as they traded as low as $144.97. Despite this, a bullish thesis on SAP emerged on r/ValueInvesting, highlighting its undervalued status with trailing and forward P/E ratios of 21.89 and 18.59 respectively, at the time of trading. Ironvine Capital Partners, in their Q2 2026 investor letter, emphasized SAP's role in the AI transition era, citing a projected $7 trillion in new debt issuance by 2029 due to increased AI adoption.

Market impact: The oversold status of SAP's shares may present a buying opportunity for investors, driving demand for the stock. SAP's undervalued status, as per the bullish thesis, could lead to a revaluation, positively impacting its share price. The projected AI transition, which SAP is poised to capitalize on, could benefit the entire enterprise software sector, including competitors like Oracle and Microsoft.

What to watch next: SAP's earnings report, scheduled for July 21, will provide insights into the company's financial health and progress in the AI space. Additionally, any updates on AI adoption trends and debt issuance projections will further clarify SAP's growth prospects. Lastly, monitor SAP's RSI to assess if it continues to be oversold or moves towards neutral territory, indicating a potential trend reversal.