Siemens Energy's Dual Narrative: Musk's Turbine Ambitions Read as Bullish Signal While Breakup Machinery Grinds On

Despite SpaceX's in-house turbine plans, record orders and analyst support suggest Siemens Energy's demand story remains intact.

The market's instinct was to sell first and ask questions later. When word circulated that Elon Musk's SpaceX planned to manufacture its own gas turbine components, Siemens Energy shares took a hit late last week, with investors bracing for a Silicon Valley incursion into a business long dominated by European engineering. But the analyst community has since mounted a coordinated pushback, and the resulting reassessment paints a far more nuanced — and ultimately more constructive — picture than the initial headline suggested.

JPMorgan's Phil Buller was among the first to pour cold water on the SpaceX scare, reaffirming an "Overweight" rating with a €245 price target after direct conversations with both SpaceX and engine supplier Howmet. The key takeaway from those discussions: Musk's company intends to produce components exclusively for its own AI data center power needs, not for the open market. That distinction matters enormously, because it transforms what looked like competitive encroachment into something closer to a demand validation.

Bloomberg Intelligence's Omid Vaziri went a step further on Monday, framing SpaceX's vertical integration plans as confirmation of a genuine turbine shortage rather than a threat to Siemens Energy's market position. The logic runs through the order book: with delivery times stretching beyond three years — customers placing orders today shouldn't expect delivery before 2030 or 2031 — the bottleneck is supply, not demand. Jefferies' Lucas Ferhani echoed that sentiment, noting that even if SpaceX wanted to become a merchant supplier, building out turbine production capability would take years, making near-term pricing pressure all but impossible.

A Record Quarter That Tells the Real Story

The analyst reassurances rest on fundamentals that arrived earlier this month. Siemens Energy's fiscal third quarter delivered an order intake of €17.9 billion — a record — while the gas turbine backlog swelled to roughly 70 gigawatts. Group-wide, the order book now stands at €162 billion. Earnings per share came in at €1.26, beating expectations by about 8.6 percent, with comparable revenue growth of 18.5 percent to €11.4 billion. Quarterly profit jumped around 70 percent to approximately €1.2 billion, while earnings before special items nearly tripled to €1.62 billion.

Perhaps most notably, roughly one-fifth of new orders originated from the data center segment, underscoring how deeply the AI-driven electricity demand boom in the United States has penetrated Siemens Energy's pipeline. The company has confirmed its full-year guidance for fiscal 2026: comparable revenue growth of 14 to 16 percent and an operating margin between 10 and 12 percent.

The wind division, long a drag on group performance, finally turned a corner. Siemens Gamesa posted its first profitable quarter since fiscal 2022, putting the subsidiary on track to reach breakeven for the full year as planned.

Market Skepticism Persists Despite the Fundamentals

For all the bullish analyst commentary, the share price tells a more cautious story. The stock was trading at €141.80 on Wednesday, up 1.1 percent from Tuesday's close of €140.20 — a modest recovery that leaves the shares down 6.6 percent on the week. The gap to the 52-week high of €195.38 now stands at 27 percent, and the stock remains well below its 50-day moving average of €153.36.

That disconnect between operational strength and market sentiment reflects a broader reality: Siemens Energy shares have become increasingly sensitive to headlines emanating from the big technology names that drive its demand. When Musk sneezes, it seems, the stock catches a cold — even when the underlying news is ultimately benign.

A Structural Overhaul Takes Shape

Beyond the immediate SpaceX narrative, the company is executing on a significant portfolio transformation that adds another layer to the investment case. Siemens Energy has initiated the carve-out of its "Transformation of Industry" division, a business employing roughly 17,000 people and generating around €5.7 billion in annual revenue. Bloomberg reports that several major financial investors — including CVC Capital Partners, EQT, Bain Capital, Brookfield and KKR — have signaled interest in acquiring a majority stake, with valuations above €10 billion considered achievable.

Simultaneously, the company is advancing its rebranding strategy. Under the new "Omterra" identity, Siemens Energy and Siemens Gamesa Renewable Energy are slated to be progressively integrated before year-end. The company will pay approximately €300 million annually through 2030 to its former parent for continued use of the "Siemens" name, despite having no equity connection since the 2020 spin-off.

The Deutsche Bank, which reaffirmed its buy recommendation with a €210 price target on August 26, framed the SpaceX development as a manageable concern given the scale of opportunity elsewhere. That assessment captures the prevailing mood among analysts: the medium-term demand story remains intact, even if the market needs time to fully digest the implications of Musk's manufacturing ambitions. For investors, the calculus ultimately comes down to whether they trust the order book or the tape — and right now, those two signals are pointing in very different directions.