If you’ve been looking for an all-around industrial holding to add to your portfolio, there’s a good chance you’ve come across GE Vernova (GEV +4.00%). And deservedly so. This company’s equipment features prominently in the world’s present and future power production. Namely, it manufactures wind turbines, natural gas turbines, and grid management solutions. It’s even in the nuclear power business.
Being in the right place at the right time doesn’t necessarily make a company’s stock a buy, however. GE Vernova shares are up nearly 600% since being spun off from GE Aerospace back in 2024, driven higher by the proliferation of artificial intelligence data centers that, in turn, created an insatiable demand for electricity, however it can be produced. That’s a tough act to follow.
Image source: Getty Images.
Don’t be dissuaded, though. In fact, while it’s been well up over the past two years, this stock’s lull since April of this year may be the best buying opportunity you’ll see for a while.
GEV – GE Vernova
$925.92+$35.59 (+4.00%)
NYSE · As of 4:00 PM ET 10/21/26
Can’t manufacture it fast enough
If you’ve heard of it at all, it’s almost certainly because of GE Vernova’s natural gas turbines. Although initially intended for utility-scale power production (and perhaps the occasional installation at a major manufacturing facility), the company’s gas turbines are being set up at artificial intelligence data centers as a quick and easy secondary or even primary source of electricity. Although its power division reported revenue growth of only 14% to $5.5 billion, for perspective, this same arm also took $16.7 billion in new orders during Q2 — up 134% — mostly due to demand for natural gas turbines.
What is GE Vernova’s biggest bottleneck right now? Simply a lack of manufacturing capacity, though the company is addressing this matter.
Don’t look past the impressive performance of GE Vernova’s other important profit center, though. Its electrification arm, which makes and markets transformers, high-voltage substation equipment, and switchgear, also experienced 68% year-over-year revenue growth to $3.6 billion, while orders grew 93% to more than $6.3 billion. All told, the company’s total backlog of business now stands at $176 billion. That’s more than three times next year’s analyst-expected top line of $53 billion (up 14%), and the backlog keeps growing.
Reliable growth ahead
But is this bright future overly dependent on the continued spread of artificial intelligence data centers?
Not necessarily. As Scott Strazik commented during July’s Q2 earnings conference call, “for our total gigawatts under contract, demand remains diverse with approximately 100 customers in 26 different countries, of which approximately 80% are traditional customers and 20% are for data centers.” Or as the International Energy Agency predicts, global demand for electricity is poised to grow by 3.5% per year through 2030. That’s a relatively small number, but it’s an enormous one for the power-production industry, which is already operating near maximum capacity.
Connect the dots. Most of this company’s past, present, and future growth reflects the world’s growing need for power beyond the fickle artificial intelligence industry’s need. As such, the bulk of GE Vernova’s long-term growth outlook is durable regardless of the economic backdrop.
This might help: The vast majority of analysts rate GEV a strong buy, with a consensus price target of $1,199.47. That’s not a bad way to start out a new trade.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
