Siemens Energy Returns €3.6bn to Shareholders as AI-Powered Gas Turbine Orders Counter Wind Woes

Profit-taking hits Siemens Energy as stock drops 5% despite record quarterly profit, raised guidance, and surging AI-driven gas turbine demand. Cash flow jumps 42%, buyback expanded.

Siemens Energy shares lost nearly 5% on Friday, closing at €169.18, even as the company posted record quarterly results and lifted its full-year outlook. The sell-off was a textbook case of profit-taking: the stock had surged more than 120% over the previous twelve months, and at the current level it still trades roughly 4% above its 50-day moving average of €163.25.

The trigger was the second-quarter report released on May 12, which showed a net profit of €0.89 per share, nearly double the €0.50 posted a year earlier. Revenue rose 9% on a comparable basis, despite significant currency headwinds. Chief Financial Officer Maria Ferraro said the weaker US dollar shaved roughly 550 basis points off top-line growth.

More striking was the jump in cash generation. Pre-tax free cash flow surged 42%, prompting management to accelerate its share buyback programme. The ongoing buyback was topped up by up to €1 billion, bringing the total for this fiscal year to as much as €3 billion. Already €1.8 billion of Siemens Energy stock has been repurchased. Combined with the €0.6 billion dividend paid in March, shareholders are set to receive a total of €3.6 billion in returns. The broader, €6 billion buyback programme announced in November remains unchanged.

Behind the numbers lies a clear tailwind: the insatiable energy demand of artificial intelligence data centres is driving orders for high-efficiency gas turbines. The company now sells roughly one in four of its gas turbines to operators of such facilities. This momentum is helping offset sluggishness in other industrial segments. Grid Technologies, meanwhile, delivered an operating margin above 17% in the quarter, and Siemens Energy is expanding capacity in the US with new plants planned in Mississippi and North Carolina.

The order backlog hit a fresh record of €154 billion, swelling by €8 billion in just three months. As a result, management raised its full-year guidance, now targeting revenue growth of up to 16% and a net profit of around €4 billion.

The biggest challenge remains Siemens Gamesa, the wind power subsidiary. The unit posted an operating loss of €44 million in the second quarter, an improvement from the €249 million loss a year earlier. Management still aims for breakeven in the second half of the fiscal year. CEO Christian Bruch acknowledged that wind turbine order intake, especially offshore, fell slightly short of expectations, but noted that 2026 was always planned as a weaker year, with a stronger rebound expected from 2027 onwards.

Analysts responded by raising their price targets. Goldman Sachs lifted its target to €212 with a “Buy” rating, arguing that new medium-term targets due at year-end should push consensus estimates higher. JPMorgan set a target of €225 with “Overweight”, while Berenberg and Deutsche Bank Research both set targets of €200 with “Buy” recommendations.

Looking ahead, the next operational checkpoint will be the third-quarter results, likely in August. CFO Ferraro said order backlog coverage stands at around 93% for the second half of 2026 and nearly 80% for fiscal 2027. New medium-term targets through 2030 are expected to be unveiled alongside the full-year results in November. For now, the market’s focus remains on whether Gamesa can deliver its promised recovery.