⁍ SAP SAPG.DE said on Monday it was going all in on its shift to cloud computing.

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⁍ Investors reacted by dumping shares in Europe’s most valuable technology company.

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⁍ JP Morgan cut its price target for SAP to 120 from 160 euros, and downgraded the stock to ‘neutral’ from ‘overweight

– Shares in SAP, Europe’s most valuable tech company, dropped 13% in pre-market trading today after the company announced a major shift in its business strategy: It’s going all in on cloud computing, Reuters reports. “We are at an inflection point,” says CEO Christian Klein. “I am not willing to trade value to our customers for short-term margin.” Cloud revenue is now expected to triple to 22 billion euros by 2025; traditional license sales have been SAP’s “cash cow,” the company says. But the shift means that the company’s long-term goal of growing profit margins by a percentage point a year in the five years to 2023 is now out of reach. “We are at an inflection point,” Klein says. “We are going all in on the cloud.” The company says it now expects total adjusted revenue in 2025 to be 36 billion euros, and adjusted operating profit to be 11.5 billion euros. That implies a margin of 31.9%—more or less in line with SAP’s third-quarter showing. In the quarter, adjusted total revenue fell by 4% while operating profit fell 12%, based on international financial reporting standards. SAP also cut its guidance for 2020, saying the reimposition of lockdowns by some governments had hit its business while hard-hit industries would now take longer than expected to recover.