Siemens Energy Pays a Political Price at Home While Global Orders Reach New Highs

Siemens Energy waives upfront payments for German clients to secure political support, while global AI data center demand drives record €154B backlog and capacity challenges.

Siemens Energy is taking a rare gamble on its home turf. The Munich-based group has quietly scrapped the usual upfront payment demands for German energy customers, waiving sums that can quickly climb into the low hundreds of millions — a move that sacrifices short-term cash to shore up political goodwill as the country pushes its energy transition. Yet this discount is a rounding error compared with the torrent of orders flooding in from abroad, where AI data centres are driving an explosion in gas turbine demand.

The scale of that global surge is staggering. In the second quarter of its 2026 financial year, Siemens Energy booked €17.7 billion in new orders, well ahead of market expectations. That pushed the total order backlog to a record €154 billion, an enormous mountain of work that promises years of revenue visibility but also creates a growing operational challenge. The backlog in gas turbines alone now stands at roughly 87 gigawatts, and some clients face waiting up to four years for delivery.

The tension between booming demand and production capacity is starting to show in the stock. Siemens Energy shares closed Friday at €153.46, a gain of roughly 25% since January but still about 21% below the 52-week high of €195.54 hit in April. The relative strength index sits at 42.7, indicating a neutral-to-slightly-oversold market, while volatility remains elevated at 54%. The stock has also lost about 14% over the past month, despite the company’s upbeat financial outlook.

That outlook remains robust. Management has lifted its annual guidance for 2026, calling for revenue growth of 14% to 16% and an operating margin between 10% and 12%. Net profit after taxes is expected to come in at roughly €4 billion, with free cash flow before taxes of about €8 billion. To underline confidence in the strategy, the group has launched the second tranche of its buyback programme, targeting share purchases worth up to €1 billion by September 2026. The overall buyback, running until the end of fiscal 2027/2028, has a total envelope of up to €6 billion. In the first week of June alone, Siemens Energy bought back 237,040 of its own shares.

Investors will be listening closely to CFO Maria Ferraro in the days ahead. She is scheduled to appear at the J.P. Morgan European Industrials Conference on 17 June, followed by the ODDO BHF London Forum on 18 June. Market participants are hoping for concrete remarks on how the company plans to expand capacity and, crucially, on the turnaround at Siemens Gamesa, the troubled wind power subsidiary that is expected to deliver a positive earnings contribution by year-end.

The German home market, where the company has waived reservation fees for new production slots, accounted for less than 10% of global sales last year. The management is betting that the long-term payoff — securing political support and a stable domestic foothold — will far outweigh the short-term revenue hit. As long as the global dash for gas turbines continues to fill the factories, that bet looks safe.