AI drives Siemens Energy's earnings

The growth of artificial intelligence and improved performance at wind turbine manufacturer Siemens Gamesa boosted Siemens Energy's results in the first fiscal quarter. Siemens Energy shares have risen more than tenfold over the past two years, making the energy equipment manufacturer Germany's sixth-most-valuable company.

Siemens Energy's net profit nearly tripled in the first three months of its fiscal year, which begins on 1 October. Reuters reports.

This was driven by demand for gas turbines and grid equipment, fuelled by the construction of data centers. Losses at wind turbine division Siemens Gamesa also narrowed. The division had struggled with serious technical defects in rotor blades and wind turbine bearings, which led to exceptionally high failure rates and the suspension of sales of some models.

Major technology companies plan to spend 600 billion dollars on artificial intelligence in 2026, driving a sharp increase in demand for power plants and the grid infrastructure needed to connect them to data centers.

Record share value

The AI boom has helped increase Siemens Energy's share price more than tenfold over the past two years, bringing its market capitalization to 137 billion euros.

“Persistently high demand in our gas turbine and grid technology businesses is making a significant contribution to our overall performance. We are also seeing the first signs of a slight improvement in wind energy,” CEO Christian Bruch said.

Siemens Energy's net profit for the quarter ended in December reached 746 million euros, up from 252 million a year earlier and exceeding the forecast of 732 million in an LSEG analyst poll.

“We believe expectations were high ahead of the start of the quarter, but Siemens Energy once again surprised on the upside,” Deutsche Bank analysts said in a note.

Siemens Gamesa, which has been grappling with quality issues, cut its operating loss to 46 million euros, compared with 374 million in the same period last year, thanks to improved productivity. Bruch said the company is expected to break even in 2026.