Siemens Energy’s Record Backlog and Saudi Milestones Give Bulls Two Reasons to Buy

Stock climbs 3.4% as €154B backlog, Saudi plant startup, and AI grid demand fuel record orders; analysts split on valuation after 42% YTD gain.

Siemens Energy shares snapped a recent lull on Wednesday, climbing 3.4% to €173.98 in XETRA trading as investors weighed a powerful one-two punch: the imminent startup of two giant Saudi power plants and a surge in grid orders tied to the artificial-intelligence boom. The stock has now gained roughly 42% since the start of the year, but the run-up has opened a fissure among analysts over whether the valuation still has room to run.

The company’s order backlog hit a fresh all-time high of €154 billion at the end of the second quarter of fiscal 2026, with €8 billion in new business added during the period alone. That pile of future revenue underpins a sharply upgraded outlook: management now expects comparable sales growth of 14% to 16% for the full year, net profit of around €4 billion, an operating margin between 10% and 12% before special items, and free cash flow before tax of roughly €8 billion. The cash generation gives Siemens Energy the firepower to expand capacity, take on larger projects, and invest in energy-transition technology — especially in grid equipment, where supply chains remain stretched.

Away from the balance sheet, concrete progress on the ground in Saudi Arabia is adding a second tailwind. The Taiba and Qassim mega-projects — two combined-cycle power plants that will replace older heavy-oil units — are scheduled to enter their first operational phase in May. The switch will cut local carbon-dioxide emissions by up to 60%. The multibillion-euro contract also includes 25-year maintenance agreements, locking in predictable service revenue for decades. Both plants are on track, reinforcing the view that Siemens Energy is executing well beyond its core European markets.

The valuation debate, however, is getting louder. Bank of America sees further upside and has slapped a €250 price target on the stock. Morningstar, by contrast, considers the shares expensive at current levels. The technical picture adds to the tension: the stock trades far above its 200-day moving average of roughly €131, a spread that historically signals elevated correction risk. A more immediate floor sits at the 50-day moving average of €164.16, a level that could be tested if sentiment sours.

Within the company, the turnaround at wind-turbine subsidiary Siemens Gamesa remains the pivotal internal variable. The unit contributed to the earnings improvement in the second quarter, lifting earnings per share from €0.50 to €0.89. For the fiscal year 2026, Gamesa must reach breakeven to validate the current fundamental story. A miss would quickly reignite selling pressure and could drag the stock back toward that 50-day line. Meanwhile, the Gas Services division posted its strongest quarterly order intake ever at €8.9 billion, with a book-to-bill ratio of 1.72 — meaning new orders far outpaced invoiced sales.

Analysts’ average fair-value estimate stands at €186.30, leaving some distance to the record high of €191.66. The market capitalisation of roughly €146 billion already places Siemens Energy among the top weights in the DAX. The next concrete catalyst comes on August 5, 2026, when the company is expected to publish detailed third-quarter results. Until then, the narrative will hinge on whether the AI-driven grid buildout and the Saudi commissioning schedule can keep delivering the kind of momentum that turns a record backlog into recurring profit.