Siemens Energy’s Profit Jumps 66% on AI-Driven Grid Orders, but Valuation Debate Heats Up

Siemens Energy posts record €17.7B orders, 66% profit jump as AI boom fuels grid equipment demand. Shares up 42% YTD but still 7% below high. Wind unit turnaround key.

The artificial intelligence boom is reshaping energy infrastructure, and no company is benefiting more directly than Siemens Energy. The German industrial group posted a record €17.7 billion in orders during the second quarter of its 2025/26 fiscal year, up from €14.4 billion a year earlier, as hyperscale data center operators scramble to secure transformers and grid stabilisation equipment. “While Nvidia builds the chips, Siemens Energy builds the power supply behind them,” captures the mood around the stock.

Revenue reached €10.3 billion, while net profit surged 66% to €835 million. Earnings per share jumped from €0.50 to €0.89, and management has guided for roughly €4 billion in full-year profit. Looking further ahead, consensus estimates see EPS climbing to €7.36 by 2027/28 — an increase of around 80% from current levels.

Beyond the headline numbers, the company’s project pipeline is delivering tangible milestones. In Saudi Arabia, two massive combined-cycle power plants, Taiba and Qassim, are set to enter initial operation in May. They will replace older heavy-oil units, cutting local CO? emissions by up to 60%, and come with 25-year maintenance contracts that provide long-term revenue visibility. The order was won years ago, but the transition from construction to operations marks a key de-risking event for investors.

Despite the record orders and profit surge, the shares have not reclaimed their 52-week high of €188. They closed Wednesday at €174.12, roughly 7% below that peak, after gaining 3.4% on the day. Year-to-date the stock is up about 42%, but the rapid ascent has left it stretched relative to its 200-day moving average of around €131, fueling a split among analysts. Bank of America sees further upside, issuing a €250 target, while Morningstar considers the current valuation expensive.

The decisive wild card remains Siemens Gamesa, the troubled wind turbine subsidiary. The division is approaching breakeven and must hit that target this fiscal year to support the group’s overall guidance. If the turnaround falters, a quick retreat toward the 50-day moving line at €164.16 could follow. For now, grid-equipment orders continue to flood in, and the next quarterly report on August 5, 2026, will show whether the AI-driven demand wave still has momentum.