Siemens Raises Profit Outlook on AI Data Center Boom But Shares Drop 6% on Investor Expectations

Siemens Raises Profit Outlook Amid AI-Driven Growth

German industrial giant Siemens raised its profit outlook for the second time this year after a strong third quarter fueled by AI spending and data center infrastructure demand1

1

. The company now expects earnings per share of €11.20 to €11.50 ($12.93 to $13.28) for the year, up from the previous range of €10.70 to €11.10 given in February1

1

. CEO Roland Busch highlighted the momentum: "The data centre business is especially dynamic. The rapid build-out of cloud and AI infrastructure is continuing to drive demand high"1

1

. Despite this positive performance, Siemens shares dropped 6% in early Frankfurt trading as the forecast fell short of investor expectations1

1

.

Record Orders Signal Strong AI Data Center Buildout Demand

Siemens posted record orders reaching €27.9 billion in the third quarter through end-June, up 14% from the prior year period1

1

. This performance exceeded analyst expectations and left the company with an order backlog of €132 billion worth of work1

1

. The Smart Infrastructure division, which supplies electrical equipment for data centers and industrial customers, saw orders jump 42% as AI infrastructure expansion accelerated1

1

. Net profit for the three months rose 15% to €2.6 billion, while sales increased 8% to €20.8 billion1

1

. Busch expressed confidence that the current AI boom will continue through 2027 and beyond2

2

.

Disappointing Guidance Raise Triggers Investor Concerns

Despite the strong quarterly results, the disappointing guidance raise triggered a sharp decline in Siemens shares. RBC bank analysts noted that the earnings "uplift appears less pronounced than peers"1

1

. They added: "Uncertainty around factors such as the macro demand backdrop and AI software risks may still limit investor enthusiasm"1

1

. RBC expert Mark Fielding observed that consensus estimates were already within the new guidance range, suggesting limited upside surprise2

2

. Concerns also emerged about how new AI tools might disrupt Siemens's own software business within its Digital Industries division1

1

.

Industrial AI and Industrial Automation Drive Performance

Siemens benefited from robust business across its two digital core divisions during the quarter. The Digital Industries unit, which focuses on industrial automation and software to automate processes, contributed significantly to earnings growth alongside Smart Infrastructure1

1

2

2

. Roland Busch emphasized the company's strategic positioning: "Our technological leadership across all businesses, the clear focus on industrial AI, and our strong positioning in attractive markets are driving our profitable growth forward"2

2

. He expects AI to increasingly drive demand for Siemens' software products, noting: "The more AI functionality you see on the shop floor, the more compute you need. This is part of our core portfolio"1

1

.

Siemens Healthineers Spinoff Plans Progress

Siemens is advancing plans to separate from its medical technology subsidiary Siemens Healthineers. CFO Veronika Bienert confirmed that relevant tax issues have been conclusively clarified with tax authorities, maintaining the timeline for shareholder votes at next year's annual general meetings2

2

. CEO Busch announced plans to reduce the number of supervisory board mandates held by Siemens Executive Board members at Healthineers from three to one, with both he and Bienert stepping down at Healthineers' February 2027 annual meeting2

2

. The first step involves divesting 30% of Siemens Healthineers, with Siemens currently holding around 67% stake2

2

. Shareholders have advocated for this split, arguing that Healthineers offers limited synergies with other businesses and ties up substantial capital2

2

.