Gas turbine maker GE Vernova is one of artificial intelligence's clear stock-market winners. Even after the recent AI-themed selloff, its shares are up 25% year to date. But Siemens Energy, its nearly identical German competitor, is down 1.4% this year and trades at a forward-earnings multiple about 40% lower. The gap is hard to justify.
GE Vernova and Siemens Energy have much in common. Both were once a part of giant conglomerates whose names they still bear. They are the world's two largest gas turbine manufacturers by firm orders since 2016, each having booked about 150 gigawatts through the first half of 2026, according to BloombergNEF. They sell electrification equipment, which is in high demand, and each has a wind business with a turbulent past. They even generate a similar amount of revenue.
Yet Siemens Energy's market capitalization is about half that of GE Vernova. Siemens Energy trades at about 19 times forward earnings, 42% less than its U.S. competitor. That is a big gap, even after accounting for the typical European discount that reflects the continent's lower growth expectations and a smaller investor pool. The Stoxx Europe 600 Industrials index, for example, is about 16% cheaper than the S&P 500 Industrials index.
There are differences, of course, but none that seem to justify such a large gap. Siemens Energy's largest revenue driver is Europe and the Middle East, markets generally seen as slower-growing than the U.S.
Siemens Energy also has a segment that sells compressors, steam turbines and other equipment to industrial customers looking to increase their energy efficiency. This unit has a lower return profile than its gas and grid businesses, and the company plans to spin it off.
The biggest overhang appears to be Siemens Energy's wind business, which struggled to integrate Spanish wind-turbine maker Gamesa after acquiring it. While both GE Vernova and Siemens Energy have had quality problems that generated losses in their wind turbine businesses, the latter's problems ran deeper, with losses at the unit peaking at roughly $4.7 billion in 2023.
Siemens Energy's wind problems have had knock-on effects. For one, it meant the company's capital allocation has been less shareholder friendly, notes Alexander Jones, equity analyst at BofA Global Research. For a few years, it was restricted from paying dividends, a condition of the government-backed funding it received to help stabilize the business.
Second, it has made the company's tone overly cautious. It was historically more conservative to begin with, but the profit warning in 2023 "really hit investor confidence and chastened Siemens Energy," said Sean McLoughlin, equity analyst at HSBC. By contrast, GE Vernova has been much better at tapping into investor enthusiasm, he said.
Siemens Energy might now be underplaying its growth potential. The company beat its initial 2025 revenue guidance by 14%, according to FactSet, while GE Vernova exceeded its target by 4.3%. Last year, Siemens Energy said it was targeting a 14% to 16% margin on an adjusted earnings before interest, taxes and amortization basis for fiscal 2028. Analysts suspect this target is too low. BofA's Jones says his team thinks the margin could be closer to 19%, near GE Vernova's own guidance for that year. Siemens Energy's margins have actually been higher than GE Vernova's over the last two quarters.
Siemens Energy's wind problems are now largely behind it. The unit broke even in its last quarter, the first time since 2022 that it didn't post a quarterly loss. The company expects the unit to break even for the full fiscal year, too.
Meanwhile, its shareholder payouts are catching up with GE Vernova. Both Siemens Energy and GE Vernova expect to return at least a third of their respective cash flows to shareholders in the coming fiscal years, according to Jones.
Despite its Europe-heavy geographic footprint, Siemens Energy has actually been outselling GE Vernova on gas turbines. From 2025 through the first half of 2026, the German company has booked 54.3 gigawatts of firm gas turbine orders, 15% more than GE Vernova, according to BloombergNEF. One advantage for Siemens Energy is its greater exposure to small- and medium-frame gas turbines, which are generally faster to deploy than the largest heavy-frame machines, said Atin Jain, an analyst at BloombergNEF.
Siemens Energy might actually be well positioned over the long-term, particularly if the air comes out of sky-high AI data center demand expectations. Gas turbine demand in its core Europe and Middle East markets are driven by more structural forces, such as electrification and a shift away from oil-fueled power.
Wind energy demand also isn't dead. It is still growing around the world, and with GE Vernova saying that it isn't focused on new offshore wind bids, Siemens Energy has gained market power. The offshore wind market is now basically a duopoly between Siemens Energy and Vestas, notes HSBC's McLoughlin.
Investors should get an updated picture of both companies soon. GE Vernova is set to report earnings this week, and Siemens Energy is expected to announce its 2030 targets next month. If their historical patterns hold, Siemens Energy's tone is likely to be more subdued.
But in the long run, shareholder returns come from business performance, not storytelling abilities. Siemens Energy is a bet on the former over the latter.
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