Siemens has reported a notable increase in orders, largely attributed to the surge in demand from the artificial intelligence sector, especially in data center investments. However, the company also experienced a minor decline in its quarterly profit.
In the second quarter, Siemens' infrastructure division, which supplies essential electrical equipment for data centers, achieved a record order intake of 7.5 billion euros (approximately $8.8 billion), reflecting a 35% increase on a currency-adjusted basis. This growth has been fueled by significant spending on data centers in the United States.
CEO Roland Busch highlighted the remarkable growth, stating that there has been "unprecedented triple-digit percentage order growth" from data center clients. He expressed confidence that this demand would sustain through fiscal 2026.
Overall Performance
In addition to the infrastructure division's success, Siemens reported an 18% increase in overall orders, totaling 24.1 billion euros. This includes contributions from various sectors such as trains, software, and medical equipment.
While Siemens' competitors, like ABB and Schneider Electric, have also reported strong sales growth, Siemens Energy, which was spun off in 2020, announced record intake driven by data center demand for gas turbines.
Profit Insights
Despite the surge in orders, Siemens' net profit fell by 8% to 2.23 billion euros. This decline was influenced by the previous year's sale of a business unit within the infrastructure division and tariffs affecting its medical and transport sectors.
Future Outlook
For the current fiscal year, Siemens anticipates a revenue growth of 6% to 8% compared to last year's figure of 78.9 billion euros. The company has slightly adjusted its expectations upward for its software and AI-related infrastructure businesses.
Busch noted that the future of AI's impact on Siemens depends on how quickly and effectively these technologies can be implemented by customers. He emphasized the need for a transition from model training to practical application, which could sustain demand for several years.
