Siemens Energy’s Twin Narrative: Record Orders and a Wind-Powered Drag

Siemens Energy posts record orders of €17.75B, driven by AI data center demand, but wind unit Siemens Gamesa struggles. Full-year guidance upgraded sharply.

The second quarter of fiscal 2026 painted a picture of two starkly different realities for Siemens Energy. On one side, the grid technology division is riding an unprecedented wave of demand, fueled by the insatiable energy needs of artificial intelligence data centers. On the other, its wind power subsidiary, Siemens Gamesa, continues to bleed cash, tempering the group’s broader success.

A Surge in Orders Defies Expectations

The company’s ad-hoc announcement on April 23 revealed a blockbuster performance at the group level. Incoming orders surged to nearly €17.75 billion, a 29.5% jump year-on-year and well above the analyst consensus of €15.6 billion. Net profit climbed to €835 million, up from €501 million in the same period last year.

The star performer was Grid Technologies. Its order intake soared 32.4% to almost €8.9 billion, outstripping the €7.3 billion analysts had penciled in. The division is capitalizing on a global rush to upgrade power infrastructure, with delivery dates for large turbines already stretching into 2030. The total order backlog has hit a record €146 billion, offering the company exceptional visibility on future revenues.

Gamesa Remains the Stumbling Block

Siemens Gamesa tells a more troubling story. The wind turbine unit booked just €846 million in orders, far short of the €1.36 billion expected. Its free cash flow before taxes worsened to negative €654 million, compared with a loss of €333 million a year earlier. While the operating result before special items improved to negative €44 million and the margin narrowed from minus 9.2% to minus 1.7%, the division is still a long way from stability. Management has set a target of reaching break-even by year-end — an ambition that remains achievable but far from guaranteed.

A Bold Upgrade to Guidance

Despite Gamesa’s persistent weakness, the board raised its full-year targets decisively. Revenue growth is now expected to land between 14% and 16%, up from the previous 11% to 13% range. The operating margin is forecast at 10% to 12%, while net profit is pegged at around €4 billion. The most eye-catching revision came in free cash flow before taxes, which is now seen hitting roughly €8 billion — nearly double the earlier projection of €4 billion to €5 billion.

Alongside the earnings upgrade, Siemens Energy has launched a share buyback program worth up to €6 billion, set to run through the end of 2028. The first tranche, of up to €2 billion, will conclude in September 2026.

Analyst Optimism Meets Market Caution

The stock has been on a tear, gaining over 42% since the start of the year. It hit an all-time high of €188 in late April before profit-taking set in. On the day of the announcement, shares edged up 0.8% to around €174.90, and they currently trade at €175.42. Bank of America sees this consolidation as a buying opportunity, lifting its price target to €250 and arguing that the company still has significant earnings upside relative to its peers.

What to Watch Next

Siemens Energy will publish its full half-year report on May 12. Investors will be scrutinizing the detailed cash flow figures to gauge whether the upgraded guidance rests on solid foundations — or whether Gamesa will once again complicate the arithmetic. The focus will also be on margins in the Grid Technologies division, which has become the engine of the group’s transformation.