Siemens Energy share price has surged in the past few years, making it one of the best-performing companies in the DAX Index. It recently peaked at €191, a record high, bringing its 12-month gains to 112%. The DAX has jumped by 5% in the same period.
From near bankruptcy to thriving
The ongoing Siemens Energy stock surge is happening a few years after the company came to the verge of bankruptcy a few years ago. Its stock has soared by over 1,600% since that era, with its market capitalization rising to over €154 billion.
Siemens Energy, which was spun off from the main Siemens, has benefited from the ongoing demand for power in Europe, United States, and other countries. This demand is being enabled by the ongoing artificial intelligence boom, with data centers consuming substantial amounts of energy.
As a result, in addition to its revenue growth, the company has become highly profitable. Its most recent results showed that its orders jumped to €17.7 billion in the first quarter, driven by its gas and grid businesses. This is notable as it is one of the top manufacturers of gas turbines that have become popular in the utility industry.
Siemens Energy made over €10.3 billion in revenue, up by 8.9% YoY. Its profit before special items rose to €1.16 billion, with Siemens Gamesa, its long-embattled business making a major turnaround.
In its statement, the company said that its free cash flow jumped to €1.975 billion in the first quarter. As a result, the management boosted its outlook for this year, with its revenue growth growing by between 14% and 16%. It also expects that its free cash flow will hit €8 billion.
The company’s business has numerous catalysts ahead. Its most important catalyst is that the ongoing data center boom in the US and other countries is leading to more demand.
The same trend is happening among other companies, including GE Vernova (GEV), Hitachi Energy, and Schneider Electric. GE Vernova stock jumped to a record high of $1,180, much higher than the all-time low of $115.
Still, the main challenge for the Siemens Energy stock is that it has become highly overvalued. Its €150 billion valuation means that it is trading at a 69x earnings multiple, making it more expensive than other fast-growing and high-margin companies like NVIDIA and Micron. It is also higher than GE Vernova’s 33.
Siemens Energy share price analysis
ENR stock chart | Source: TradingView
The weekly timeframe chart shows that the Siemens Energy stock price has soared in the past few months. It has jumped from a low of €7.38 in 2023 to €180 today. It remains slightly below the year-to-date high of €191.
The stock remains above all moving averages, with the 50-week moving average being at €130. All pullbacks have become good entry points in the future.
Therefore, the stock will likely continue rising as it rides the AI wave. If this happens, the next key level to watch to watch will be at €191. A move above that level will point to more gains towards €200.
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