AI boom powers Siemens to record annual profit

German engineering conglomerate Siemens reported record annual profit and announced ambitious growth targets, driven by the artificial intelligence boom. The company's core industrial profit, excluding certain sales, rose 13% to €13.3 billion for the fiscal year ending September. Siemens anticipates continued growth in the current fiscal year, with sales growth expected between 9% and 11%, alongside stable or higher profit margins in its two largest divisions.

CEO Roland Busch credited the AI boom for the company's success, stating that it is providing an ambitious outlook for fiscal 2027 and raising its group-level mid-term targets. The company's smart infrastructure business, which focuses on AI-powered infrastructure solutions, saw orders surge 40% to €8.67 billion in the fourth quarter, fueled by significant contract wins from data center clients.

Meanwhile, Siemens' digital industries division, which develops software for engineering and automation, recorded a 16% increase in orders to €6.41 billion over the same period.

The AI-driven shift is part of Siemens' broader "Industrial AI" strategy, which has seen the company pivot towards higher-margin software products in recent years. Siemens joins other global tech leaders such as Microsoft and Meta, which have collectively invested billions of dollars in AI data centers, benefiting companies like Siemens that supply critical equipment for these facilities.