(Bloomberg) — Just seven days after a slump caused by widespread market concerns over an artificial intelligence bubble, Europe’s biggest winners on the subject are back to near-record levels.
Buoyed by a wave of analyst optimism and a broad-based stock rally, Siemens Energy AG shares rose 13% this week, hovering near record highs and fully reversing last Friday’s 10% drop. This pushed the company’s market value to nearly 100 billion euros ($116 billion).
“Global power demand is increasing, especially in markets where Siemens Energy is active,” said Nicholas Demeter, an analyst at B. Metzler Thiel Thorne & Co. AG, who upgraded the stock to Buy on Monday. He added that the stock remains attractive due to its attractive valuation and the company’s strong order backlog.
The German company, which was spun off from industrial giant Siemens AG in 2020, has soared 320% on surging demand for data centers, a key part of AI infrastructure, making it Europe’s best-performing stock in 2024. It has risen another 127% so far this year, and the upward momentum is expected to continue.
More than a fifth of analysts tracked by Bloomberg raised their price targets for the company after the renewable energy company announced a share buyback plan of up to 6 billion euros last week. Stocks fell the next day as short-term investors took profits amid market concerns about whether the big investments in AI were paying off.
Brokers remain optimistic. Analysts at Berenberg, led by Richard Dawson, were among those who raised their price targets, saying that while the broader theme of data centers could cause the stock to move, it “remains positive” given its earnings growth forecast and shareholder returns framework.
In early November, Siemens Energy significantly raised its medium-term financial targets due to strong demand for gas turbines and data center equipment and progress in restructuring its troubled Gamesa wind turbine division.
Deutsche Bank analysts led by Gael Debray said the company was “building tomorrow’s energy infrastructure” and also raised its targets this week.
Showing its staying power, Siemens Energy is currently the best performer in the UBS basket of European AI stocks in 2025 and is on track to extend its winning streak to two years. It also shows resilience to the concerns that plague other AI names.
“The correlation between AI stocks and Siemens Energy has been relatively high over the past few months, but this week things have changed somewhat,” Demeter said. “Siemens Energy has performed significantly better than Nvidia.”
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