Siemens Energy's Split Personality: Gas Turbine Strength Battles Wind Power Concerns and Rare Earth Dependency

Siemens Energy's €154B order backlog masks wind turbine warnings and rare-earth risks, as stock slides 14% despite 25% yearly gain.

The German industrial group finds itself juggling two starkly different narratives. A booming gas turbine business, turbocharged by the global AI race, is dragging order books to record heights, while the ailing wind subsidiary Siemens Gamesa is firing off fresh warnings about capacity cuts from 2028. The result is a stock that has lost nearly 14% over the past month, despite being up a solid 25% since January.

The headline figure is staggering: Siemens Energy sits on a €154 billion order backlog, a record that highlights the insatiable demand for grid infrastructure and power generation equipment. Yet beneath that surface, investors are growing uneasy about the group’s heavy reliance on Chinese rare earths for critical components such as generators and grid technology. Operationally, the company cannot afford any supply-chain disruption, and market observers argue that any fair valuation of the shares hinges on the group locking down those sourcing routes.

Against this backdrop, the wind business is sending mixed signals. On the one hand, Siemens Gamesa has achieved a milestone at the UK’s Sofia offshore wind farm, where all 100 turbines have been installed and grid connection work is now under way. On the other, Gamesa boss Vinod Philip is publicly warning that European factories are heading for a capacity crunch. He estimates the European Union is missing around 40 gigawatts of offshore wind capacity to meet its 2030 targets, with some 16 gigawatts of German projects alone at risk. While plants are currently running at full tilt, a shortfall of new orders after 2028 could force the group to slash resources. The unit nonetheless sticks to its target of reaching profitability in its fiscal year 2026.

The gas turbine division is taking a more aggressive stance. CEO Christian Bruch has warned that Europe is falling behind in the race to build AI data centres, for which the group supplies essential infrastructure. In an unusual move, Siemens Energy is now offering German energy utilities free production slots for new gas turbines, waiving the usual multi-million-euro reservation fees. The company frames the initiative as a contribution to the domestic energy transition.

Investors will get more clarity later this week. CFO Maria Ferraro is scheduled to speak at the J.P. Morgan conference in London on Wednesday, where the market expects updates on free cash flow and the ongoing share buyback programme — in June alone, Siemens Energy purchased over 237,000 of its own shares.

The share price closed the week at €153.46. Chart watchers note the stock has slipped well below the 50-day moving average of €168.70, and a recovery above the 100-day line at €160.96 would be needed to halt the correction that began after the April high. The relative strength index sits at a neutral 42.7, leaving room for moves in either direction in the near term. Longer term, the stock remains comfortably above the 200-day line at €136.66, suggesting the broader uptrend is still intact, provided the gas turbine engine can keep pulling the wind anchor.