3rd Update - Siemens Raises Mid-Term Outlook as AI-Driven Data Center Demand Boosts Order Growth

Rewritten, added CEO comments about data centers in the third paragraph, updated stock price information from the fourth paragraph onwards, starting at the twelfth paragraph.

John Revill

Reuters Zurich, November 12 - Siemens SIEGn.DE on Thursday reported fourth quarter results that exceeded expectations, and raised its mid-term growth outlook, driven by strong demand for trains and AI-related data centers that continue to fuel order growth.

CEO Roland Busch said he is not concerned about a slowdown in data center construction, after concerns about projects facing increasing political scrutiny triggered a tech stock sell-off last week (link).

Busch added that the current uncertainty surrounding Nvidia NVDA.O founder and CEO Jensen Huang's future (link)—stemming from an alleged espionage scandal—will also not affect the AI chipmaker’s cooperation with Siemens (link).

After the earnings release, Siemens shares rose 4.7% in early Frankfurt trading.

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The German engineering group's product range spans trains and electrical equipment for factories, buildings, and data centers. The company said that in the three months to September 30, industrial profit rose 22% to 3.89 billion euros ($4.31 billion).

This figure marks an all-time high for Siemens, beating the consensus estimate of 3.71 billion euros compiled by the company.

Revenue grew 11% to 23.68 billion euros, topping the expected 23.39 billion euros, while orders surged 58% to a record 34.77 billion euros.

The surge in order volume was mainly driven by Siemens’ mobility business and its smart infrastructure division, which serves data centers, winning major contracts.

Siemens provides products for data centers including power distribution equipment, cooling equipment, and digital simulation of facilities.

Based on the company's 143 billion euros of outstanding orders (including 7 billion euros for data center products), and the recovery of the industrial market, Siemens now expects mid-term comparable annual revenue growth of 7% to 11%, up from the previous 6% to 9% forecast.

"We see broad business opportunities. We see strong growth trends and dynamic key markets," Busch told reporters.

Siemens said its data center orders doubled this quarter.

Busch noted there is broad consensus in the United States about the importance of data centers for economic growth.

"Given these developments, we have no concerns, at least over the next few years," Busch said.

Siemens also detailed its plan to cut its stake in Siemens Healthineers (SHLG.DE), saying it will transfer shares to shareholders at a ratio of one Siemens Healthineers share for every two Siemens shares held, accounting for 34.1% of its stake.

(1 USD = 0.9027 euro)

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