Siemens Energy Sees Data Centers Driving Demand Into 2030s
(Bloomberg) -- Siemens Energy AG expects the artificial intelligence boom that’s driving data center construction to bolster its sales for years to come.
The manufacturer is sold out in major parts of its business until 2030 and beyond as the electrification trend is proving structural, Chief Financial Officer Maria Ferraro said Tuesday. The company also announced plans to execute its €6 billion ($7 billion) share buyback program faster amid strong orders for its gas turbines and grid products.
Siemens Energy sees “demand going well into the end of the decade and into the next decade,” the CFO said in an interview with Bloomberg Television. “Now it’s about converting those orders into revenue, revenue into margin, margin into cash.”
The German company is benefiting from demand for components needed by power-hungry data centers, especially in the US. Its gas turbines are increasingly used in regions where grid constraints delay new connections. In the first half of this fiscal year, the firm booked orders for 179 turbines — that’s nearly as many as the 194 it sold in fiscal 2025.
But Bernstein analysts led by Alasdair Leslie flagged a weaker business mix that weighed on margins at the gas business, adding that the company offered few updates compared to its early earnings release last month. Siemens Energy shares declined 1.7% as of 9:17 a.m. in Frankfurt. The stock is still up around 45% this year.
Its European peers that make energy and cooling equipment and automation technology for factories are seeing similar tailwinds. Schneider Electric SE, ABB Ltd. and Legrand SA all reported better-than-expected sales growth in recent weeks, driven by demand for products used in data centers.
“The demand is very strong regarding AI and data center build-out,” Ferraro said. “That’s really structural in nature.”
Siemens Energy aims to keep its exposure to data center demand in the gas turbine segment at around a quarter and below 10% in the grid unit, Chief Executive Officer Christian Bruch said on a call with journalists.
To be sure, the boom is exhibiting some signs of strain. Big technology companies are committing vast sums to AI infrastructure, sapping free cash flow while returns take longer to come in.
Moreover, many of these investments are depending on each other. Tech firms are funding AI developers that in turn commit to buying their cloud and chip services. The model works fine as long as there’s growth. If that comes to a halt or even reverses, companies risk being hit by weaker orders and losses on their investments.
Siemens Energy has a “relatively broad base of diverse customers” in the data center space, Bruch said.
Earlier on Tuesday, Siemens Energy said it plans to purchase an additional as much as €1 billion of its own stock this fiscal year. That raises its buyback target for the period by 50%.
The move won’t increase the total volume of the company’s multi-year buyback program, a spokesperson said. That still stands at as much as €6 billion by the end of the 2028 fiscal year, though analysts have hope for more.
The acceleration “could result in a higher total buyback program further down the road,” RBC Capital analyst Colin Moody said in a note.
(Updates with shares in fifth paragraph.)
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