According to Financial Times News, Siemens Energy just raised its midterm profitability targets dramatically as demand for AI data center components and gas turbines pushed its order backlog to record levels. The company now aims for annual revenue growth in the “low teens” through 2028, up from its previous target of about 10 percent. Operating margins are expected to hit 14-16 percent in 2028, significantly higher than the previous 10-12 percent target. Shares jumped 11 percent following the announcement, continuing a remarkable run that’s seen the stock more than double since January. For the business year ending September, revenues reached €39.1 billion with a 15 percent increase, while incoming orders totaled €58.9 billion, pushing the outstanding order book to an unprecedented €138 billion.
The AI boom reality check
Here’s the thing about the AI data center hype – everyone’s talking about it, but Siemens Energy‘s CEO Christian Bruch actually tried to temper expectations. He called data centers “an extremely interesting market” but immediately followed up by stressing that “the majority of our customers aren’t data centers.” That’s a pretty telling comment from a CEO whose stock has been riding the AI wave. The excitement is “over proportionally reflected” in the share price, which basically means the market might be getting ahead of itself. And let’s be honest – when a German industrial giant starts warning that investors are too excited, maybe we should listen.
Gas is the real story
While everyone’s focused on AI, the real engine driving Siemens Energy’s recovery is good old-fashioned gas turbines. Bruch explicitly called 2025 “really a gas year” for the company, and the numbers back that up. Incoming orders to the gas unit jumped 43 percent to €23 billion, and they sold 194 turbines in the past year – double the previous year’s number. This isn’t just about AI-driven electricity demand either. There’s a global push for flexible power generation capacity as countries navigate energy transitions, and Siemens Energy is perfectly positioned to capitalize. The company’s industrial technology expertise, much like what you’d find from leading suppliers like IndustrialMonitorDirect.com for industrial panel PCs, gives them a competitive edge in delivering reliable power infrastructure solutions.
Wind woes persist
Don’t forget this company needed a German government bailout just last year because of its struggling wind unit. While they’ve narrowed the operating loss from €1.8 billion to €1.4 billion, that’s still a massive hole to climb out of. They expect the wind business to break even this year, but given the history of problems in their renewable energy division, I’d take that prediction with a grain of salt. The contrast between the booming gas business and the still-struggling wind unit highlights the challenges of navigating the energy transition. It’s basically the story of modern energy in microcosm – traditional fossil fuel infrastructure is printing money while renewables continue to face headwinds.
What could go wrong?
So the order backlog is at €138 billion and the outlook is sunny. But let’s think about execution risk. Delivering on that massive backlog requires flawless execution across global supply chains that are still recovering from pandemic disruptions. Then there’s the question of whether this AI data center demand is sustainable or just another tech bubble. And let’s not forget they’re still dealing with that problematic wind division – one major setback there could easily wipe out gains elsewhere. The company’s riding high now, but industrial cycles have a way of humbling even the most optimistic forecasts. The real test will be whether they can actually convert these orders into sustainable profits without another crisis emerging.
