The future of German industry has just been rewritten in the Nevada desert. Siemens $SIE (+0,96 %) CEO Roland Busch announced at the CES that there should be "Physical AI" in every factory in the world. This is about artificial intelligence (AI) that does things. Busch even compares this to the invention of electricity in terms of its scope.
Busch and Nvidia $NVDA (+0,16 %) CEO Jensen Huang want to build an "operating system for industrial AI", i.e. an operating system for industrial production that integrates AI deeply into the physical world.
Siemens is contributing its extensive knowledge of automation, factories and industrial software, while Nvidia is supplying its AI hardware (GPUs), simulation platforms (Omniverse) and AI algorithms ("Agentic AI"). Siemens supplies the blueprints for the industry, Nvidia the "brain".
In this way, Siemens wants to escape the "old economy" assessment. If you are perceived as a partner of Nvidia, the multiples increase - in other words, what investors are willing to pay for your profits.
Siemens is quoted at a price/earnings ratio (P/E) of 23, while Nvidia's profits are valued almost twice as high at a P/E of 40. Our colleague Steffen Bosse writes: "On a par with Nvidia". This would mean that Siemens shares have significant potential.
Example: Pepsico $PEP (+0,77 %). The company uses the new "Digital Twin Composer" from Siemens. This is used to build digital twins of factories. Before even a single screw is turned in the real world, the factory is already running virtually.
According to Pepsico, a Gatorade factory was made 20 percent more efficient within three months. And - this is music to every CFO's ears - investment costs were reduced by up to 15 percent. That's hard cash.
Example: Siemens and Nvidia. The vision is to first simulate products and entire factories completely virtually (in the "metaverse") before they are physically built. Nvidia, for example, uses Siemens software to simulate its own new "Vera Rubin" chips and the cooling systems of its "AI Factories". Siemens, in turn, uses Nvidia's AI to accelerate design processes (EDA).
Factories are to be highly automated in order to counteract labor shortages and save energy. Jensen Huang emphasizes that AI is revolutionizing the programming of robots, as AI can now learn on its own.
Example: Siemens and Meta $META (+1,28 %). It's about Ray-Ban smart glasses for factory workers. It's called "immersive engineering". You stand at the machine, look at it and the glasses show you which switch needs to be flipped or call in an expert.
Siemens is positioning itself as the link. Nvidia is responsible for the power, Meta for the interface and Siemens for the application.
What do the analysts think?
In an analysis by Bernstein Research, the analysts use a comparison from the movie "Matrix". They say: Investors have to decide. Do you take the "blue pill" and believe the hype will pass? Or do you take the "red pill" and believe the AI boom is real?
If it is real, data centers, power grids and automation will be needed. Bernstein is overweight. Siemens is virtually the shovel salesman in the AI gold rush - without electricity and control, there is no AI.
For the portfolio, this means that Siemens is one of the few German stocks in the global AI game. They have the hardware, they have the software - and they have the friends in Silicon Valley.
Siemens remains a basic investment that is now being given a hefty dose of tech fantasy. The share has already performed well and you can't expect the price to double quickly. Analysts see only three percent price potential in the short term
However, if word gets around that AI is real and Siemens is part of AI, the share price could continue to rise. With a market capitalization of 200 billion euros, there is still a lot more upside for Siemens in view of the billion-euro valuation of the big tech players.
Source: WELT, 09.01.26
