Siemens Shares Hit Record as Data Center Boom Drives Orders
(Bloomberg) — Siemens AG’s shares rose to a record after the company said the boom in power hungry data centers will drive demand for its transformers and grid technology in the coming year.
Comparable revenue is expected to rise as much as 7% this fiscal year, after rising 3% in the 12 months through the end of September, Siemens said Thursday. Siemens raised its dividend 11% to €5.20 ($5.48) per share.
Siemens has seen orders for its electrification products jump as the surge in artificial intelligence investments gave rise to more data centers with massive energy requirements. The growth has helped offset weaker results for its factory-automation business, which has seen orders drop amid an ongoing slump in China. Siemens net income reached a record €9 billion in fiscal 2024.
Siemens Chief Executive Officer Roland Busch said in a speech,
The continuing boom in digitalization and artificial intelligence, the growing demand for higher resilience and the steps toward an all-electric and decarbonized world offer tremendous opportunities for all our offerings,
The company’s shares rose as much as 9%, the biggest intraday jump since March 2022, helping push the stock up about 40% in the past 12 months.
The growth has offered a reprieve for Siemens, which has seen sales of factory-automation equipment suffer from a prolonged downturn in China. Siemens isn’t alone: Swiss rival ABB Ltd. last month reported a decline in orders there, and both companies are banking on fresh government efforts including tax cuts to revive the economy.
Revenues in Siemens’ key digital industries unit, which makes machines and systems to automate manufacturing, fell 10% in the fiscal year through September. Chief Financial Officer Ralf Thomas said Thursday that the unit will likely start to recover in the second half of fiscal 2025, and that thousands of job cuts are planned.
Busch, speaking Thursday in a Bloomberg TV interview, said the company is well positioned to take advantage of China’s plan to invest in high-tech manufacturing. He added that private consumption has yet to improve despite Beijing’s stimulus efforts.
Busch said,
We have a very strong position in China,
“It is of utmost importance for us that the Chinese market is picking up.”
Siemens anticipates only moderate global economic growth in the current fiscal year as risks, such as the prospect of rising trade tensions after Donald Trump’s election to the White House and the collapse of Germany’s three-party coalition government, are rising.
Busch told reporters,
Times won’t be getting easier, following the elections in the US and considering the political situation in Germany,
Yet the company is well prepared for potential trade conflicts between the European Union and the US as Siemens manufactures a very high percentage of products sold in the US locally, Busch said.
The CEO said,
We have a very diversified value chain,
“We are not happy about trade barriers, but they would hit us less than others.”
Busch is pivoting the German industrial manufacturer to higher-margin, software-driven product lines to improve profitability. In October, Siemens announced it would buy software maker Altair Engineering Inc. for an enterprise value of $10 billion, its largest-ever acquisition that is expected to close in the second half of 2025. Siemens plans further investment and acquisitions, Busch said.
Jefferies analysts led by Simon Toennessen said in a note.
Siemens delivered a strong Q4, a solid outlook and a much better than expected dividend proposal,
Munich-based Siemens is also grappling with high energy prices and an economic slump in its home country. Busch said the German government needs to invest more in sectors including infrastructure and education and work toward reducing energy prices for industry.
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Siemens Shares Hit Record as Data Center Boom Drives Orders, source
