Siemens AG: Best Idea H2'26 – The dual-engine AI compounder

Siemens AG is our Bernstein Best Idea for the end of 2026. We see Siemens approaching three important inflection points at the same time. Thematically, we are three years into the AI build out phase but just beginning a new phase, adoption of AI into the physical economy; Siemens offers unique exposure to both sides of AI investment. Operationally, Digital Industries is at a cyclical and margin inflection point, which AI can structurally enhance. Strategically, the Healthineers separation should complete a decade of portfolio simplification, making Siemens' new earnings power easier to understand (~90% of profits from DI + SI) and value. Still trading at a ~20% discount to EU electrical peers, we rate Siemens Outperform with a target price of €330. We forecast FY27 IB sales growth accelerating to +11% (vs +9% VA) and IB margins of 18.6% (vs 17.7% VA);