Siemens Energy, a German turbine manufacturer, reported on Wednesday that its quarterly profits had nearly tripled as the company benefits from the surge in demand for energy brought on by the development of artificial intelligence.
The company’s gas turbines, which power data centers that supply AI computing capacity, are in high demand as US tech behemoths like OpenAI and Meta quickly expand their operations.
In the first quarter of the group’s fiscal year, which ended in December, net profit increased from 252 million euros to 746 million euros ($889 million).
At 17.6 billion euros, orders, a predictor of future sales, rose by a third.
In Frankfurt trading, the company’s shares increased by more than five percent, making it the best-performing stock so far in Germany’s blue-chip DAX index and up over a quarter since the year began.
Morgan Stanley analysts noted in a note that Siemens Energy’s gas turbine orders were “exceptionally strong” and that the company’s ads “checked all of the major boxes that investors were looking for with these results.”
According to the International Energy Agency, data centers in the United States currently consume six to eight percent of all electricity used in the country, and by 2035, their electricity consumption is expected to more than treble.
When asked about growing orders on an earnings call, Christian Bruch, CEO of Siemens Energy, stated that he believed the first-quarter numbers were not “particularly strong” and that more growth was likely.
“There is a very high demand for gas turbines,” he stated. “We’re discussing delivery dates in 2029 and 2030.”
As part of larger ambitions to generate 1,500 jobs, Siemens Energy, which was carved out of the larger Siemens company in 2020, announced this week that it would invest $1 billion to expand its US activities, including a new equipment plant in Mississippi.
Since 2023, when the German government was forced to give the company credit guarantees due to quality issues at its wind turbine unit, its shares have more than tenfold grown.
