2G Energy: Record Data Center Contract Powers Rally, Analyst Tempers Enthusiasm

2G Energy's largest-ever order from US data centers nearly doubles its share price. Analyst First Berlin downgrades to 'Add' due to limited upside. Near-term margin squeeze expected, but 2027 outlook strong.

A single deal has nearly doubled 2G Energy’s share price since the start of the year, yet the analyst community is already recalibrating its expectations. The German energy systems specialist landed its largest-ever order in late May, a containerised power supply contract for US data centres that analysts estimate to be worth more than $100 million. The stock surged to €69.60, a 90% year-to-date gain and nearly 39% in the past 30 days alone.

The order, effective from May 26 and won by the company’s North American subsidiary, covers power generation in the low triple-digit megawatt range. Deliveries will begin in the second half of 2026 and stretch across several years. Management is already in advanced talks with additional data centre customers, flagging the potential for follow-on contracts of similar magnitude.

Yet the euphoria has prompted a tactical downgrade from First Berlin Equity Research. On May 27, the firm cut its rating to “Add” from “Buy,” even as it raised the price target sharply from €44.00 to €73.00. The reasoning was purely mathematical: after the rally, the implied upside now sits at just 8% – well below First Berlin’s own 25% threshold for a buy recommendation.

Margin mix clouds the near term

The massive order is a growth catalyst, but it comes with a short-term trade-off. Because machine deliveries will temporarily account for a larger share of revenue than the higher-margin service business, 2G Energy’s EBIT margin for 2026 will feel the squeeze. The company’s guidance calls for a margin between 9.5% and 10.5% – and reaching the top end of that range is far from certain.

Revenue for the current year is now expected to land at the upper end of the €440 million to €490 million corridor. That forecast was issued alongside the order announcement, confirming that management sees the deal as an inflection point rather than a one-off event.

2027: the year margins are meant to peak

The real payoff is pencilled in for next year. The board projects 2027 revenue of €570 million to €620 million, a jump of roughly 20%. The EBIT margin is expected to break through 11%, powered by a higher share of service revenues and operating leverage from the data centre ramp-up. That outlook assumes the company converts its pipeline of potential data centre deals into firm contracts.

In the meantime, 2G Energy’s operational base continues to expand. With more than 10,000 installed units worldwide, the company argues that its field experience in ensuring maximum uptime gives it a competitive edge in a market where reliability is paramount.

ERP transition delays 2025 results

One lingering drag is the delayed publication of the full-year 2025 figures, now pushed to June. The holdup stems from the implementation of a new enterprise resource planning system at the production subsidiary 2G Heek GmbH, which has complicated year-end closing procedures. Management has indicated that the EBIT margin for 2025 will come in at the lower end of the 6.5% to 8.0% range, weighed down by one-time ERP costs and difficulties in the German service business.

Without those headwinds, the stock might have rallied even sooner. As it stands, the data centre deal has already rewritten the narrative. The next test will come in June when the delayed 2025 numbers are finally published – and investors will discover whether the market has already priced in all the near-term upside.