Siemens Puts Brussels on Notice as AI Investment Flows Westward

Siemens shares hit multi-month highs amid hydrogen train deal, $285M US AI investment, and CEO Roland Busch's criticism of EU AI Act driving capital to US and China.

The industrial giant is juggling a packed agenda: a hydrogen train deal in Romania, a $285 million commitment to US AI infrastructure, and a stock that has surged nearly 25% in the past month. But beneath the headlines lies a sharper message from CEO Roland Busch — Europe’s regulatory approach to artificial intelligence is costing it capital.

Siemens shares touched 254.80 euros on Tuesday, their highest level in months, extending a rally that began when the stock crossed its 200-day moving average in mid-April. The 30-day gain now stands at roughly 25%, lifting the market price well above the 52-week low struck in April 2025. At current levels around 251 euros, the equity trades at about 13 times expected operating profit for 2027 — a discount to the sector average of 19 times that analysts say is too wide to ignore.

A Hydrogen Deal With a Funding Gap

Siemens Mobility has secured a 325-million-euro contract to supply 12 Mireo Plus H hydrogen trains to Romania’s railway reform authority, ARF. The order includes a 30-year maintenance agreement, with the trains slated to enter service on non-electrified regional routes around Bucharest from 2029.

The deal’s backstory is unusual. Three previous tender rounds failed, leaving Siemens Mobility as the sole bidder. More critically, the European Union funding originally earmarked through the National Recovery and Resilience Plan fell through before the contract was signed. ARF is now hunting for alternative financing, and the timeline for securing it remains uncertain.

Analyst Calls Grow Louder

HSBC upgraded Siemens from “Hold” to “Buy” and lifted its price target to 300 euros. Analyst Sean McLoughlin points to the automation business within Digital Industries as the primary catalyst, alongside the planned spin-off of Siemens Healthineers in 2027, which he argues will eliminate the conglomerate discount.

Bernstein’s Alasdair Leslie echoes the bullish view, highlighting the valuation gap: Siemens trades at 13 times forecast 2027 operating profit versus a peer average of 19 times. He also flags the ongoing share buyback program and expectations of a follow-up tranche worth up to 10 billion euros as additional drivers.

AI Ambitions and a Transatlantic Pivot

Busch used the Hannover Messe to deliver a blunt warning: Siemens will direct its roughly 1-billion-euro industrial AI budget primarily to the United States and China unless the EU changes course. Of that total, 285 million dollars are earmarked for US manufacturing and AI data centers, tied to the creation of more than 900 skilled jobs.

The CEO’s criticism targets the EU AI Act, which takes full effect on August 2. Busch argues that treating industrial AI like consumer applications piles unnecessary oversight on sectors already subject to their own regulations. Chancellor Friedrich Merz backed him on the same stage, calling for an exemption for industrial AI. The European Commission has signaled some flexibility — including a delay of up to 16 months for high-risk AI rules — but Busch considers the concessions structurally insufficient.

Autonomous AI Reaches the Factory Floor

Amid the political debate, Siemens is pushing products to market. The Eigen Engineering Agent, unveiled at Hannover, aims to move industrial AI from support tool to autonomous executor, promising efficiency gains of up to 50% in automation tasks. Integrated into the TIA Portal — which counts over 600,000 users — the system has already completed pilot projects with more than 100 companies across 19 countries.

Lithium and the Long Game

Separately, Siemens is committing up to 67 million euros to the “Lionheart” lithium project run by Vulcan Energy in the Upper Rhine Graben. The company will handle automation and infrastructure for an annual production target of roughly 24,000 tonnes of lithium hydroxide, with the contract running through at least 2035.

Earnings on the Horizon

The first-quarter industrial profit rose 15% to 2.9 billion euros, with Smart Infrastructure orders reaching 7.2 billion euros on the back of data center demand. Management responded by lifting its full-year EPS guidance to a range of 10.70 to 11.10 euros.

All eyes now turn to May 13, when Siemens reports half-year results — the first under new CFO Veronika Bienert. Analysts are forecasting full-year earnings of 10.97 euros per share and a dividend of 5.64 euros. The numbers will serve as the first real test of whether the recent rally has fundamental backing, or whether the political and regulatory headwinds Busch flagged will eventually catch up.