Siemens Energy Cements AI-Led Growth With Record Backlog and Sharpened Financial Targets

Siemens Energy doubles free cash flow forecast to €8B, raises buyback to €3B, and sees record €154B order backlog from AI-driven data-center demand, despite a 4.7% share dip.

The artificial intelligence boom is reshaping the energy infrastructure landscape, and no company is capitalizing more aggressively than Siemens Energy. On Friday, the group laid out a series of upgraded targets that underline just how deeply the data-center spending spree is flowing into its order books. Free cash flow before taxes is now expected to hit €8 billion for the full year — double the prior forecast of €4 billion — while net profit is seen reaching around €4 billion. The operating margin, meanwhile, should climb to as much as 12 percent.

Those numbers sent a clear signal to the market, yet the share price slipped 4.7 percent on Friday to €169.68, erasing some of the year’s hefty gains. Even so, the stock remains up roughly 38 percent since January, with analysts at both JP Morgan (target €225) and Goldman Sachs (target €212) arguing there is still room to run, citing the group’s entrenched position in the energy transition.

Cash Returns Accelerate as Orders Surge

The improved cash flow outlook has given management the confidence to quicken the pace of shareholder returns. Siemens Energy now plans to buy back up to €3 billion of its own shares during the current fiscal year, up from a previously planned €2 billion. The overall buyback program remains capped at €6 billion; the company is simply front-loading the purchases. Combined with the March dividend, a total of €3.6 billion will flow back to investors this year.

The decision is backed by a second quarter that saw free cash flow before taxes jump 42 percent. Order intake surged 30 percent to €17.7 billion, pushing the overall order backlog to a record €154 billion — equivalent to roughly five years of revenue at current run rates. Chief Financial Officer Maria Ferraro noted that 93 percent of capacity for the second half of fiscal 2026 is already booked, and nearly 80 percent for the following year is spoken for.

Gamesa’s Deficit Shrinks as the Core Business Booms

A closer look at the wind-turbine subsidiary Siemens Gamesa offers a more nuanced picture. The troubled division posted an operating loss before special items of just €44 million in the quarter, a sharp improvement from the €249 million loss a year earlier. The loss margin narrowed from minus 9.2 percent to minus 1.7 percent, helped by higher productivity, tighter cost control, and initial commercial orders for the new turbine platform. Order intake at Gamesa held steady at €846 million.

Yet some investors remain impatient. Hedge fund Ananym Capital has publicly called for a spin-off of the wind business, arguing that Gamesa continues to weigh on the valuation of the thriving core operations. Chief Executive Christian Bruch has resisted that demand, insisting that an operational turnaround is the right path. The company is due to unveil new medium-term targets through 2030 in November, alongside full-year results, at which point management will need to demonstrate that Gamesa can reach break-even.

US Data Centers Drive a Global Expansion

The real engine of growth is the grid technologies segment, where orders from data centers are piling up at an extraordinary pace. In the first half alone, the group collected nearly €2 billion in orders tied to AI and computing infrastructure. US orders nearly doubled to almost €7 billion, and Siemens Energy plans to expand transformer capacity by 50 percent by 2030 to keep up with demand.

The Indian subsidiary also delivered strong results, with after-tax profit rising more than 50 percent, adding further geographic diversification to the group’s top line.

With order books stretched deep into the decade and cash generation accelerating, Siemens Energy has moved beyond the recovery narrative. The challenge now is to keep all the spinning plates in the air — the booming grid business, the Gamesa restructuring, and the pressure from shareholders who want the full value of both storylines reflected in the share price.