Siemens Energy: All gas (& electricity), no brakes
A €100bn power and grid equipment superpower (15% of global power generated with its equipment) at an inflection point, a huge beneficiary of the AI buildout, generational load growth and grid cycles
Welcome to the 46th investment case, 26th reshoring/sovereignty, 21st AI & data center and 14th electrification & grids idea on Crack the Market (and the most comprehensive Siemens Energy investment case you will find online)! Join me as I dissect one of the most important companies in the world at the heart of the power bottleneck, an electrification champion (dominating power generation and distribution) and one of the best vehicles to play the generational inflection in load growth, grid investment supercycle and AI data center buildout megatrends.
Twice a week, I will release deep dives into stocks and sectors that fit into the three themes that I see winning in this age of tariffs and deglobalization: resilience, sovereignty & reshoring, China. I will then deep dive into the opportunities in the AI data center value chain.
Take advantage of this once in a generation opportunity to build long term wealth by investing in great stocks that will deliver returns for your portfolio for years to come.
You can already read my first 45 deep dives, all of which I see as winners in this new world of tariffs and deglobalization:
ASML (reshoring & China idea): The most innovative company in the world will 2.5x its EPS by 2030.
LKQ (resilience idea): The most defensive business in the auto industry is a tariff winner and could become a compounder.
Atlas Copco (resilience, reshoring & China idea): The best industrials business in the world is on sale, extremely resilient and will benefit from US reshoring.
Badger Meter (resilience idea): The perfect business in the perfect end market, water meters are the definition of resilience.
Knorr Bremse (resilience idea): Who knew making brakes was this lucrative? Rerating with self help story and upside from German infra plan.
Flex (reshoring idea): The electronics manufacturing giant building Nvidia’s servers and enabling reshoring is becoming a better business.
Itron (resilience & reshoring idea): Riding the grid investment super cycle and enabling smart grids.
Roper (resilience idea): A resilient cashflow compounder in the software space with inflecting growth.
RELX (resilience idea): The company to own forever – one of the very best businesses on Earth.
CPKC (resilience & reshoring idea): The rail connecting Canada/US/Mexico and benefiting from reshoring.
Novo Nordisk (resilience idea): The most exciting pharma company in the world is misunderstood and its growth engine is ready to roar back to life.
Kurita (resilience, reshoring & China idea): Water services expert with improving margins and benefiting from reshoring of semiconductor production.
Halma (resilience idea): High quality compounder in safety, health and environmental technologies.
Quanta Services (resilience & reshoring idea): Countercyclical compounder riding a multi decade infrastructure buildout.
Infineon (China idea): Power semiconductor leader with strong structural drivers (AI power and China auto) amidst a cyclical recovery.
Hubbell (resilience & reshoring idea): Pure play on US electrification demand driven by AI and grid investment cycle.
Iberdrola (resilience & reshoring idea): Best integrated utility in the world with a stellar track record and solid growth driven by networks and renewables
Nvidia (AI & data center idea): The backbone of the AI world is unstoppable.
Veolia (resilience & reshoring idea): Resource management giant (water, waste, energy) due for a rerating.
TJX (resilience idea): The retail giant that keeps winning.
DSM-Firmenich (resilience idea): The diversified ingredient powerhouse benefiting from a transformational deal.
Zoetis (resilience idea): Leader in animal healthcare.
Prysmian (reshoring idea): Global cable leader entering a golden age.
Bentley Systems (resilience & reshoring idea): The software compounder bringing infrastructure into the AI age.
Givaudan (resilience idea): The highest quality and most resilient ingredient compounder has a compelling valuation.
First Solar (reshoring idea): The rising Sun in a new electricity supercycle.
Arcadis (resilience & reshoring idea): An engineering and design consultancy giant poised for a rerating.
Thermo Fisher (resilience & reshoring idea): Life Science tools giant just had its clearing event and is a stealth reshoring winner.
Nexans (reshoring idea): Electrification pure play with visibility into 2030.
Croda (resilience idea): A covid darling with a ridiculous valuation is at an inflection point.
Copart (resilience idea): One of the best businesses on Earth is being sold off, should you jump in?
Schneider Electric (resilience & reshoring idea): The Electrification champion that keeps compounding.
Cadence (resilience idea): A defensive compounder in the semi space & one of the most profitable software businesses in the world is getting better.
SAP (resilience idea): The unstoppable growth engine behind every business.
FICO (resilience idea): The Score Behind the Score.
Siemens (resilience & reshoring idea): The best conglomerate on Earth is sitting on EUR70bn of optionality.
MP Materials (resilience & reshoring idea): The Western rare earth champion.
Sopra Steria (resilience & reshoring idea): This boring IT business is a hidden Defense and Sovereignty play.
Hoffmann Green Cement (reshoring idea): Cementing a green future.
Oracle (resilience idea): The Oracle of the AI Age.
Dassault Systemes (resilience & reshoring): Why are investors overlooking this Software giant?
Eli Lilly (resilience & reshoring): The best pharma company in the world.
Air Liquide (resilience & reshoring): The ultimate defensive earnings compounder.
CATL (China): The battery titan with electrifying growth.
Broadcom (AI data center): The $1.7tn AI underdog
After reading this article, you will understand why this company is so special thanks to its global leading position in power generation and transmission (across gas turbines, grids and wind turbines), what it does, why it is so geared to the current investment supercycles in electricity, grids and AI data centers, why it is at an inflection point in terms of demand and margins driving incredible cash generation and why it remains one of the best businesses to own for the next decade.
In this article I go through:
Siemens Energy’s business, its exceptional portfolio and how it dominates the power and grid sectors.
How the company is one of the best vehicles to play the generational load growth, grid and AI data center supercycles.
How the company has turned its profitability around in a few years, now delivering exceptional profit growth and cash generation backed by a record backlog.
How the company is at an inflection point, preparing to deliver a once in a lifetime demand wave with huge ramp ups of its critical products and services.
Why the market still underestimates its margin potential and why the company is turning into a cash machine.
