Chips and cloud infrastructure may get most of the attention in the AI boom, but neither can operate without electricity. Power comes first for every AI data center, creating a significant role for GE Vernova (GEV) in the broader buildout. The company is not a chipmaker or a cloud provider; instead, it supplies much of the equipment needed to convert electricity into usable power for hyperscale data centers.
The Bottleneck GE Vernova Controls
GE Vernova’s position in the gas turbine market gives it a potentially powerful advantage as AI data centers run into growing electricity constraints. Together with Siemens Energy (SMEGF), the company controls most of the Western heavy-duty gas turbine market, leaving relatively few suppliers capable of meeting the surge in demand. That limited supply is translating into significant pricing power. Its gas turbine order book is already fully booked through 2029, with additional bookings extending into 2030 and 2031. Across gas power equipment and slot reservations, GE Vernova's gas power backlog has grown to roughly 116 gigawatts. At the same time, gas turbine prices have increased by around 300% over the last three years. That increase highlights how far demand has moved ahead of the amount of equipment the global industry can produce in a year.
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A meaningful portion of that backlog is already tied directly to major data center projects rather than speculative future demand. The company’s turbines are already supplying power to xAI’s Colossus 1 campus, while almost another gigawatt is being deployed for OpenAI’s Stargate project. Google (GOOGL), Amazon (AMZN), Microsoft (MSFT), and Oracle (ORCL) are also among its customers. According to management, approximately 20% of the gas equipment under contract is now tied to data centers. Importantly, GE Vernova does not have direct exposure to the swings in hyperscaler capital spending or the chip cycle. The company plays a more fundamental role by supplying the power equipment needed regardless of which AI company ultimately captures the most demand.
About GE Vernova Stock
GE Vernova is an energy technology company that provides equipment and services used to generate, transmit, and manage electricity. It operates through three main segments. The Power segment designs, manufactures, and services gas, nuclear, hydro, and steam technologies. It is the company’s biggest division, accounting for over 53% of total revenue. Moreover, technologies across GE Vernova help generate approximately 25% of the world’s electricity. The company also provides equipment, software, and energy storage solutions for businesses. Founded in 2023, the company is headquartered in Cambridge, Massachusetts.
Over the past year, GEV shares have climbed 64%, outperforming the S&P 500’s ($SPX) gain of 15% during the same period. The trend has continued on a year-to-date basis as well, with the shares surging 46%, outperforming the S&P 500’s gain of 11% during the same period.
www.barchart.comA Closer Look at GEV's Q2
GE Vernova reported its second-quarter fiscal 2026 earnings on July 22. It reported mixed quarterly results, with earnings per share of $2.47 falling short of Wall Street's $3.04 expectations. The company’s revenue rose to $11.1 billion, comfortably beating the consensus of $10.73 billion. Adjusted EBITDA for the quarter was $1.2 billion, up 61% year over year. The strong adjusted EBITDA and working capital management drove $5.1 billion of free cash flow in the second quarter. On portfolio actions and shareholder returns, CFO Kenneth Park said the company completed the disposition of its remaining ownership stake in the China XD Grid business for approximately $600 million of pretax proceeds, and the company returned about $3.9 billion to shareholders in the first half of 2026. Moreover, the company saw an increase in orders. Equipment orders rose 77% from a year earlier, while services orders increased 12%.
Looking forward, the company raised its full-year 2026 revenue guidance to $45.5 billion to $46.5 billion. It also lifted free cash flow guidance to $11.5 billion to $12.5 billion. The increase in guidance was because the company noted strong first-half results and continued momentum in its business. It expects the second half to be stronger than the first half, with the highest revenue and EBITDA expected in the fourth quarter. Power segment organic revenue is now expected to rise 18% to 20%, while Electrification revenue is estimated at $14.5 billion to $15 billion.
What Do Analysts Expect for GEV Stock?
On Sept. 17, Morgan Stanley analyst David Arcaro reiterated a Buy rating on GEV and assigned a price target of $1,350. The analyst’s Buy rating reflects GEV’s strong outlook. The company’s growing backlog, which management expects to reach about $200 billion by early 2027, is seen as a strong indicator of customer demand. Arcaro believes this large backlog provides visibility into future sales and could help the company improve profitability for years to come. In addition to Arcaro, Andrew Obin from Bank of America Securities has also maintained a Buy rating on GEV with a price target of $1,310.
Based on 30 Wall Street analysts covering the stock, GEV stock holds a consensus “Strong Buy” rating. Out of those, 22 have a “Strong Buy” rating, two have a “Moderate Buy” rating, five have a “Hold” rating, and one has a “Strong Sell” rating. The mean price target of $1,226.78 reflects 24% upside from current levels. The stock has a high price target of $1,450, which is quite impressive and reflects investor confidence in the long-term growth prospects of the company.
barchart.com On the date of publication, Jabran Kundi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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