Siemens Energy's Record Backlog Fuels Rally as Investors Await Wind Unit's Report

Siemens Energy's stock nears record highs on a €146B order backlog and strong Q1 profits. The sustainability of its rally depends on the turnaround of its Siemens Gamesa wind subsidiary.

Siemens Energy AG’s stock is trading just shy of its all-time high, propelled by a staggering order backlog and robust core performance. Yet, the sustainability of this rally hinges on the upcoming half-year report, with all eyes fixed on the progress—or lack thereof—at its troubled wind subsidiary, Siemens Gamesa.

The company’s order book swelled to a record €146 billion in the first quarter of fiscal 2026, a foundation that analysts say fundamentally supports the current share price of €167.32. New orders surged by 33% to €17.6 billion during the period. This growth is partly driven by the global grid expansion, a trend supercharged by exploding electricity demand from AI data centers. The Grid Technologies segment saw its profit more than double year-over-year in Q1, capitalizing on this momentum.

Beyond the backlog, Siemens Energy’s core operations are firing on all cylinders. Net income for the first quarter soared to €746 million, nearly triple the figure from a year earlier. The company’s gas turbine manufacturing capacity is fully booked through 2028, with initial orders already secured for 2030. A recent major infrastructure win includes the contract to supply high-voltage direct current converter stations for the UK's Eastern Green Link 4 project, a 640-kilometer subsea cable link between Scotland and England, with main construction set to begin in 2028.

For the full 2026 fiscal year, management targets comparable revenue growth of 11% to 13%, a net profit between €3 billion and €4 billion, and a free cash flow before taxes of €4 billion to €5 billion. The adjusted EBITA margin is forecast at 9% to 11%, with analysts projecting earnings per share around €3.96. The company also expects its tariff burden to be noticeably below the prior-year level, aided by its 28 production sites in the United States.

However, the path to achieving its ambitious group margin target of 14% to 16% by 2028 runs directly through Siemens Gamesa. The wind unit’s quarterly loss narrowed dramatically from €374 million to €46 million, showing significant progress. Yet, it remains unprofitable for the first half of the year, and its official goal of reaching operational breakeven for the full 2026 fiscal year is far from guaranteed. The internal debate over the unit's future adds another layer of complexity. Activist shareholder Ananym is pushing for a spin-off, viewing Gamesa as a structural drag, while institutional investors like DWS and Union Investment support the current integration strategy.

Shareholders are also benefiting directly from the company’s strong performance. A massive share buyback program is underway, with Siemens Energy authorized to repurchase up to €6 billion worth of its own stock by 2028. The first tranche, worth up to €2 billion, runs until the end of September 2026. Between early March and April 6 alone, the company bought back approximately 7.3 million shares. Combined with dividend payments, Siemens Energy plans to return roughly €10 billion to shareholders over the next two years.

As the company enters a quiet period ahead of its half-year report on May 12, the market is in a holding pattern. The stock has rallied 194% from its 52-week low and gained 12% recently, bringing the all-time high of €169.20 within striking distance. A sustained breakout above this level could open further upside, chart technicians suggest. The recent expansion of a collaboration with Amazon Web Services signals the company's push to build digital energy solutions as a second pillar of growth.

Ultimately, the May 12 report will serve as the next critical test. Investors will scrutinize two key metrics: the margin trajectory at Siemens Gamesa and the generated free cash flow. The record backlog provides a formidable buffer against downside risk, but the question remains whether the wind unit’s promised turnaround can finally gain the traction needed to justify the stock’s premium valuation.