Siemens Posts Record €124 Billion Backlog as Cashflow Surges 71%, Underscoring Data Centre Tailwind

Investors found plenty to cheer in Siemens' latest quarterly results, even as margins slipped. A stunning jump in free cashflow and an order backlog that has swelled to an all-time high of €124 billion are the headline numbers driving fresh buying interest. The stock climbed nearly 3.3% on Wednesday to €264.65, taking its one-month gain past 9%, while the broader market zeroed in on the visibility that the towering backlog provides.

Net cash from operations told a particularly powerful story. Free cashflow soared 71% year-on-year to roughly €1.7 billion, a leap that caught many analysts' attention. That strength came despite a nominal dip in group revenue to just below €19.8 billion — on an adjusted currency basis, turnover still rose 6%. Order intake, meanwhile, hit €24.1 billion, translating into a comparable increase of 18% and a book-to-bill ratio of 1.22, meaning the company booked more new business than it invoiced.

The margin picture was less cheerful. Industrial profit margin landed at 15.4%, down from the year-ago level, and diluted earnings per share eased to €2.58. Currency headwinds and tough comparatives were the main culprits. Yet management left its full-year guidance unchanged: comparable revenue growth of 6% to 8% and a book-to-bill ratio above 1. That consistency seems to have reassured the market that the underlying demand story remains intact.

Should investors sell immediately? Or is it worth buying Siemens?

Electricity for the demand story is being generated by data centres. Smart Infrastructure was the star performer, racking up a quarterly order record of €7.5 billion — a 35% surge — as hyperscalers and enterprises rushed to build out computing capacity. Artificial intelligence is the catalyst: more AI workloads require more data halls, and Siemens supplies the automation, digitalisation and control technology that makes those facilities run. The company expects this wave to extend for several years.

Digital Industries also contributed, with orders climbing 12% to €4.8 billion. That division is more exposed to the classic factory-automation cycle, so the improvement provides some relief. Siemens’ strategic bet on "physical AI" — the fusion of software, automation and real-world production — is designed to carry the data-centre tailwind into the factory floor over time.

The strong cash conversion and outlook have prodded several heavyweight analysts to raise their price targets. JPMorgan now sees the stock at €335 (Overweight), Bernstein at €300 (Outperform), Goldman Sachs at €290 (Buy) and Barclays at €230 (Underweight). Goldman’s Daniela Costa, who expects earnings momentum to comfortably exceed the consensus in 2027, also anticipates that Siemens will soon replace its expiring share buyback programme with a fresh one. That prospect adds another layer of support for shareholders.

Technically, the stock has come a long way in a short space. The relative strength index stands at 81, deep in overbought territory, and the shares are trading well above their 50-day moving average of roughly €236. The rapid ascent carries the risk of pullbacks, and the next big test for the fundamentals will come in August with third-quarter figures. For now, however, the combination of a record order book and surging cashflow gives Siemens an unusually broad runway — enough to keep the bulls engaged even as the margin story takes a breather.

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