Siemens Energy’s Dual Engine: Data Center Demand and a €12.4 Billion Restructuring Play

Siemens Energy rides AI-driven electricity demand and a potential €12.4B division spin-off, with shares up 96% in a year as Gamesa nears breakeven.

The narrative around Siemens Energy has flipped in the span of a year. Once hammered by losses at its wind turbine subsidiary Gamesa and reliant on state-backed guarantees, the Munich-based industrial group now finds itself at the intersection of two powerful currents: soaring electricity consumption from artificial intelligence and a potential corporate overhaul that could unlock billions in shareholder value. The result has been a 96% share price surge over the past twelve months, with the stock adding another 10% last week alone.

Behind the rally lies a fundamental shift in how markets perceive the company. AI doesn’t just need powerful chips — it needs relentless, round-the-clock power. Tech giants scrambling to build hyperscale data centres are turning to gas turbines for baseload capacity, a segment where Siemens Energy is a global leader. That positioning was underscored by the recent order for the 2.6-gigawatt Taweelah C plant in Abu Dhabi, where the company is supplying the entire turbine package. The project is a direct illustration of how digital infrastructure is becoming a core growth driver for a business long dismissed as a turnaround story.

Yet the biggest catalyst may still be on the drawing board. Siemens Energy is actively exploring a separation of its “Transformation of Industry” (ToI) division, which houses the Dresser Rand compressor business, steam turbines and hydrogen electrolysers. With annual revenue of around €5.7 billion and roughly 17,000 employees, the unit generated earnings of €646 million in 2025. Management projects that figure could triple by 2031 as sales double to €11 billion. Bank of America values the division at roughly €12.4 billion, while other analysts put the range between €9.5 billion and €15 billion. The logic is simple: spinning off or listing 60% of the business would streamline the group and close a persistent valuation discount versus peers.

The move is not without complications. ToI’s hydrogen electrolyser business is currently running at a negative margin of 22%, a drag that has tempered enthusiasm. Still, the unit’s overall potential has convinced Bank of America to maintain a price target of €250 on Siemens Energy shares, with a Buy rating. Deutsche Bank Research is also positive, targeting €200. Both see the spin-off as a value unlock that outweighs near-term headwinds.

Operational traction elsewhere is adding ballast to the equity story. Gamesa is expected to reach operational breakeven in 2026, easing a long-standing concern. Meanwhile, the grid technology division recently landed a major contract for an offshore converter platform in Rostock, a project tied to North Sea wind power transmission. If the client exercises an option for the first construction phase, the total contract value could reach up to €2.5 billion. Such wins help offset margin pressure in the wind business and reinforce the group’s pricing power in high-technology segments.

The share price closed Friday at €168.88, down 0.81% on the day but still up more than 38% since the start of the year. The stock now sits more than 22% above its 200-day moving average of €138.34, while the 100-day average of €161.93 provides the nearest support. The relative strength index stands at 55.5, putting the shares in neutral territory — neither overbought nor oversold. With the 52-week high of €195.54 still in sight and fresh data centre orders expected to fuel further gains, Siemens Energy appears to have recast itself as a candidate for both deep value and growth.