Siemens Energy Rides the Data Center Power Wave as AI Fuels a 120GW Market Forecast

Siemens Energy raises global power plant demand forecast to 110-120 GW annually, fueled by AI data center growth. Stock up 36% YTD, with disciplined capital strategy and long-term targets.

The insatiable energy appetite of artificial intelligence is reshaping the landscape for power-generation equipment makers. As hyperscalers like Amazon and Google pour billions into server infrastructure, the need for reliable, dispatchable electricity has become a critical bottleneck. Siemens Energy is emerging as one of the clearest beneficiaries of this shift, with management now projecting annual global demand for new power plants at 110 to 120 gigawatts — a sharp upward revision from its previous ceiling of 100 GW. The jump is largely attributed to data centers, where AI is forecast to account for roughly 40% of total electricity consumption by 2030, up from just under 20% today.

The competitive backdrop underscores the scale of the opportunity. GE Vernova’s gas turbine plant is already fully booked through 2029, with initial orders stretching into 2031. Siemens Energy offers comparable high-efficiency gas turbines alongside grid connection solutions, placing it squarely in the path of a global investment wave that shows no sign of ebbing. Meanwhile, the software component of its Grid Technologies division is expected to climb to around 40% of system value by 2035, driven by the need for intelligent control of weather-dependent renewables. A market report forecasts nearly 8% annual growth for grid automation through that year, promising significantly fatter margins for the unit — though semiconductor lead times remain a constraint, stretching to as long as 40 weeks for critical chips.

The Munich-based group has combined this operational momentum with a disciplined capital strategy. Management has already bought back more than two million of its own shares, and is authorized to repurchase up to 10% of share capital by 2029. That year also marks the target date for its long-term financial plan: revenue of around €59.5 billion and an operating profit of €7.1 billion, implying double-digit annual growth from current levels. The stock price has tracked the improving narrative, closing at €167.88 on Friday for a year-to-date gain of 36.71%. Technical indicators suggest the rally remains on solid footing: the share price trades almost in lockstep with its 50-day moving average, has broken well clear of the 200-day line, and the relative strength index sits at a neutral 54, implying neither overbought nor oversold conditions.

Regulatory headwinds, however, could temper the pace of build-out. In Germany, a stricter energy efficiency law took effect on 24 June 2026, requiring data centers to incorporate more renewables and waste heat recovery. Industry associations are already calling for a swift revision of the Combined Heat and Power Act to create the investment certainty needed for new controllable gas-fired plants. Across the Atlantic, 48 data center projects failed last year in the US alone, stymied by local opposition or insufficient grid capacity. But for Siemens Energy, these hurdles may ultimately reinforce demand for its high-efficiency technology, as operators seek to meet tighter standards without sacrificing reliability.