Stargate AI boom trumps offshore wind downs as Siemens Energy eyes US 'sweet spot'
US offshore wind only accounts for fraction of energy technology giant's revenue while data centre power grab should fuel big opportunities, say bank's analysts
Positives such as President Donald Trump’s $500bn Stargate AI project outweigh US downsides for Siemens Energy such as an offshore wind seabed lease ban, analysts said.
Stocks of the German energy technology giant, which owns wind turbine OEM Siemens Gamesa, continue to trade at a significant discount to its US rival GE Vernova, a Deutsche Bank analyst team led by Gael de-Bray told investors as it reiterated a ‘buy’ recommendation.
Trump, OpenAI, SoftBank and Oracle this week jointly announced the creation of a new company called Stargate to develop AI infrastructure in the US, with an initial investment of $100bn that is planned to grow to $500bn in coming years.
“Siemens Energy shares have been on a rollercoaster in recent weeks but in our view positive news flow (Stargate project, National Energy Emergency in the US) more than offsets negative news flow (blade issue in Sweden, restrictions to Offshore wind in the US),” the analysts said.
“Strong electricity consumption growth and the requirements of the energy transition and AI deployment necessitate massive investments in energy infrastructure, supporting the group's grid and gas turbine businesses.”
Siemens Energy shares surged 6.53% to €55.14 ($57.32) on the Frankfurt stock exchange Wednesday and rose another 1.89% early Thursday to €56.18.
'In the sweet spot'
The increasing demand for data centres, which are central to AI technology, as well as the reliable energy capacity needed to run them, has "brought a boom to all energy companies that is unparalleled", Kaeser is quoted as saying.
The positive news eclipsed previous negative developments.
And for all three projects that are currently being built with Siemens Gamesa wind turbines (700MW Revolution Wind, 900MW Sunrise Wind and 2.6GW Coastal Virginia), federal permits and offtake agreements are in place.
Delays at Revolution and Sunrise announced by developer Orsted have origins outside the scope of Siemens Gamesa and should be covered by contractual terms, the bank notes.
“Trump's Executive Order is negative for sentiment, but the financial impact is negligible in our view. Under a National Energy Emergency, the lost growth opportunity in the US wind market should be more than offset by stronger growth for other power sources, primarily gas.”
In late 2023, the company said that some turbines of its 5.X platform would need to be repaired and that the process would take several years.
“Blades manufactured in-house have had no issue so far, those coming from external suppliers are more likely to cause problems,” Deutsche Bank also noted.
Trump’s AI boosting programme, by contrast, will give Siemens Energy incremental support, the note said.
AI data centres to fuel power grab
“Deploying AI requires massive amounts of infrastructure, data centres and power. At the moment, we see transmission as the largest opportunity as power generation is often in the wrong places,” the analyst said.
“Siemens Energy’s grid business (30% of group revenues in FY25e) is expected to grow at a 20% CAGR over 2024-28.
“There's also upside to the mid-term growth outlook for its gas turbine business (31%) with the potential announcement of large data centres (>1GW) powered by gas-fired power plants in coming years.”
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