Europe’s Hottest Stock Has an American Architect

Forced to seek a government rescue barely a year ago, Siemens Energy AG was an unlikely candidate for Europe’s best performing stock of 2024. The fact that a General Electric Co. spinoff, GE Vernova Inc., unwittingly assisted its rival’s resurrection is even more remarkable. Yet the more investors compare the two electrical power-equipment giants, the more the German firm should benefit.

Spun out of Siemens AG in 2020, Siemens Energy was forced to ask Berlin for financial guarantees in 2023 following quality problems and massive losses at its wind unit. From that nadir, the stock price has since increased around sevenfold as investors bet the wind issues won’t require a dilutive recapitalization and began paying more attention to the company’s gas turbine and power-grid activities, which are benefiting from rising electricity demand. This year’s 300% price gain exceeds that of any other member of the Stoxx Europe 600 index.