Siemens Energy lifts global gas turbine outlook on data center demand

Germany's Siemens Energy sees no signs of demand weakening in the global gas turbine market and has raised its outlook for annual additions to between 110 and 120 gigawatts for the coming years amid surging demand from data centers.

The upgraded forecast, outlined June 29 during Siemens Energy's pre-close call for the third quarter of fiscal 2026, represents a significant increase from the company's previous estimate of 90-100 GW per year.

The upward revision comes as power equipment-makers enjoy record orders and a sustained rally in their share prices amid investor enthusiasm for AI-driven power demand growth.

"We are operating in a structurally growing electricity market, driven by electrification and long-term demand trends," Tobias Hang, Siemens Energy's head of investor relations, said on the call.

The company has identified a "base market" of about 70 GW to 80 GW, driven by coal-to-gas switching -- particularly in the Middle East -- with data centers and AI-related demand set to provide significant additional volume on top, Hang added.

On June 30, Siemens Energy confirmed plans to supply turbines for the planned Misfah and Duqm gas-fired power plants in Oman totaling 2.6 GW. The equipment will be manufactured in Germany.

While data centers are an "important contributor" to Siemens Energy's growth, demand remains "well-diversified across geographies and customer types," Hang said.

The executive said the company does "not observe any slowdown" in momentum for its gas turbine division, which recorded its highest-ever quarterly order intake of Eur8.9 billion ($10.2 billion) in the fiscal second quarter.

The market remains "supply-constrained rather than demand-constrained," despite the expansion of manufacturing capacity by Siemens Energy and its peers, Hang said.

Siemens Energy's gas turbine order backlog stood at about 60 GW at the end of its second quarter, with the group now "booked out" until fiscal 2028, Hang said. Slots for 2029 and 2030 are "filling up very quickly," the executive noted.

The company expects 90 GW to 100 GW of total commitments — across orders and reservation agreements — by the end of fiscal 2026. Hang said Siemens Energy's focus is converting those reservations into firm orders within six to 12 months on average, allowing it to benefit from improving pricing dynamics.

Pricing "remains favorable" and customers continue to be willing to pay a premium for faster delivery — reflecting the fact that speed is "currently more critical than efficiency," Hang said.

"This is especially visible in projects related to hyperscalers and data centers, where pricing remains particularly strong," the executive said, pointing also to Siemens Energy's grid technologies division.

The power equipment-maker noted in May that grids are its fastest-growing and most profitable business area, as it raised the division's full-year guidance for revenue growth and profit margin.

"Overall, we continue to see no signs of demand weakness, and order visibility remains high, well beyond the current fiscal year," Hang said.

Siemens Energy will publish its fiscal third-quarter results on Aug. 5.