Electrical Products · Outside the Retail 100

GE Vernova

GEV

Our rating: buymedium conviction
12-month target: $1,176.08 +36.4%
Expected vs. S&P 500: +18.1 ptsSee the math
Next earnings: Jan 27In 83 days

GE Vernova is pricing 2026 gas turbine orders about 50% above 2025's per kilowatt, and most ship in 2028 or later, so that profit is still ahead.

Summary

GE Vernova sells gas turbines, grid equipment and wind turbines, and gas turbines drive the stock. Customers have reserved or ordered five to six years of its turbine output, grid backlog is up 60% in a year, partly from an acquisition, and wind still loses money. The stock is 25% below its June high, while 2027 earnings estimates are flat over 90 days. Analysts expect earnings to rise about a third in 2028, and we agree, because that output is already contracted.

$918.04

+$336.78 (+57.94%)Past year

What GE Vernova does

GE Vernova, Siemens Energy and Mitsubishi Heavy have won about 90% of large gas turbine orders since 2015, and GE Vernova has the biggest fleet running. It also sells grid equipment and wind turbines.^{1,2,15,26,25,27,30}

What it sells

Power50% of revenue, first nine months of 2026
Gas, steam, nuclear and hydro gear plus service, and most of the profit. It overtook Mitsubishi in advanced gas turbines in 2024.
Electrification32% of revenue, first nine months of 2026
Transformers, switchgear and grid software for utilities and data centers. It trails Siemens Energy's grid unit, whose backlog is about $59B to its $42B.
Wind19% of revenue, first nine months of 2026
Onshore and offshore wind turbines and service. It had 56% of 2024 U.S. onshore installations, ahead of Vestas, but still loses money.

Who buys it

Utilities, independent power producers and, increasingly, data center builders. Management counts about 100 gas turbine customers in 25 countries, roughly a fifth of them building for data centers. Grid equipment orders tied to data centers topped $6B this year.

Where you've seen it

Wind farms along highways: about 59,000 of its wind turbines are installed around the world.

What a customer buys

A gas turbine sale starts 20 years of service work, and service is where Power earns most of its profit

A buyer orders a turbine years ahead and pays before it ships: a fee to hold a factory slot, then down payments once the order is firm. Many also sign a long-term service contract for parts, inspections and overhauls. The first major overhaul comes four or five years after delivery.

That service stream is the profit. Of Power's roughly $19B of 2025 revenue, about $12B was gas and steam services, and Strazik said almost all of the segment's profit sat there. Equipment earned little until repriced orders began shipping in the third quarter of 2026.

The fleet now being built adds to it for decades. Management expects each gigawatt of the HA, its biggest turbine, to bring about $0.5B of service revenue over 20 years. Service contracts also raise prices every year under escalation clauses.

This is what separates GE Vernova from Siemens Energy and Mitsubishi. All three are sold out, but GE Vernova runs the biggest fleet, so each turbine it ships at today's prices joins the largest service book.^23,2,15

Gas and steam services: About $12B
Service target, 2035: At least $22B
HA service revenue: $1B+ → $4B
Per HA gigawatt: About $0.5B

Where we landWe'd own GE Vernova for the service book and treat the equipment boom as what enlarges it. Even if signings fall, every turbine shipped through 2030 adds service revenue into the 2040s.

Three makers, one queue

GE Vernova has the longest queue of the three big turbine makers, so rivals can offer earlier slots

Three companies build most large gas turbines: GE Vernova, Siemens Energy and Mitsubishi Heavy. All three are sold out for years, which is why prices are rising across the industry, not only at GE Vernova.

GE Vernova's queue is the longest. It has 122 gigawatts under contract and ships about 20 a year, roughly six years of output by our arithmetic. Siemens Energy has 69 gigawatts against the 15 to 16 it could deliver this year, about four and a half years. Mitsubishi's large-turbine backlog is 35 gigawatts, with new orders delivering from 2028 to 2030.

All three are adding capacity. GE Vernova reaches 24 gigawatts a year in 2028, mostly by getting more out of existing plants. Siemens Energy is adding capacity for about 15 more large turbines in 2027. Mitsubishi plans to roughly double output from 2024 levels.

A long queue cuts both ways. It locks in GE Vernova's prices for longer. But a buyer who needs power before 2030 can likely get it sooner from a rival with a shorter queue, so we think rivals' open slots cap GE Vernova's next price rise.^{1,2,23,25,27,18,22}

Maker	Gas backlog	Yearly output	New orders deliver
GE Vernova	122 GW, 58 of it slot reservations	About 20 GW now, 24 GW by 2028	Slots now sold for 2032
Siemens Energy	69 GW	15 to 16 GW possible in 2026	Lead times of three years or longer
Mitsubishi Heavy	35 GW, large turbines only	16 GW sold in fiscal 2025	2028 to 2030

Where we landGE Vernova's pricing power lasts as long as its rivals stay sold out. The signal to watch is Siemens Energy's or Mitsubishi's lead times shortening; that caps the next price rise before it shows in GE Vernova's own orders.

How the business makes money

The backstory

GE spun off GE Vernova in April 2024. Since then, data centers, factories and electrification have pushed power demand up faster than turbine makers can build, and GE Vernova's gas contracts doubled in a year, from 62 gigawatts to 122. CEO Scott Strazik's answer is to raise prices, add factory capacity in steps, to 24 gigawatts a year by 2028, and take large down payments before building.

GE Vernova earns twice on each gas turbine: once selling it, then again on years of service. The shortage lets it raise prices, collect cash early, and spend that cash on grid businesses and buybacks.^1,2,3,4,16

1 · DemandPower shortageBuyers need plants faster than anyone can build them. Utilities and data center builders are competing for the same turbines.
2 · Pricing powerSold-out slotsScarcity lets GE Vernova charge more. It is now selling delivery slots for 2032, so buyers accept higher prices and deposits.
3 · Cash firstDown paymentsCustomers pay before turbines ship. That cash funds new factory capacity and buybacks years before the revenue is booked.
4 · Margin lagShipmentsHigher prices reach profit years later. New heavy-duty orders take about three years to deliver, so margins rise as repriced turbines ship.
5 · AnnuityService contractsEvery turbine sold adds service work. The services backlog is $93B, nearly half of all backlog.
6 · Second engineGrid dealsCash buys grid businesses. Prolec GE, and Trench once it closes, add transformers and high-voltage parts the same customers need.

Advantages

Biggest fleet, paid again on service

Major advantage

GE Vernova wins on what it has running: more than 7,000 gas turbines, the world's biggest fleet, whose service work brings in most of its gas revenue. CEO Strazik says its global heavy-duty share is near its historical level, so the boom shows up in price. The service edge lasts. The pricing edge fades as rivals add capacity from 2027.

1.Paid after the sale. About $5B of its $10B gas service revenue comes from long-term contracts averaging 12 years. Its roughly 125 HA turbines, its biggest model, are now reaching their first major overhauls.
2.Data centers' bridge power. Aeroderivatives are turbines adapted from jet engines. GE designs held about 64% of five-year sales through 2024, and Mitsubishi's about 5%.
3.Fell, fixed, retook first. GE fell to third in early-2018 orders as blade flaws idled HA turbines. It retook first in advanced turbines in 2024, after Siemens Energy spent 2023 fixing wind turbines.
4.Customers fund the build. Buyers pay non-refundable fees to hold slots, one developer $25M for a 2030 turbine. Down payments fund new machines in existing plants, so no new factory idles if orders fall.^{15,16,24,23,25,28,29,26,27,22}

Sold out, and paid up front

Strong advantage

Real, but every big maker has it, so it strengthens the first card rather than standing alone. GE Vernova has 122 gigawatts under contract, 58 of them reservations. Siemens Energy's backlog is 69 gigawatts and Mitsubishi's 35, with new orders delivering in 2028 or later. Scarcity lifts everyone's prices until rivals' added capacity arrives in 2027 and 2028.^1,2,18,22,27

Grid equipment bought ahead of demand

Supporting

A second, steadier profit stream. Electrification earns margins close to Power's, and Prolec GE and Trench add transformers and high-voltage parts. The catch is price: Trench costs about 13 times its expected 2028 EBITDA (operating profit before depreciation and amortization).^1,2

What's changing

Turning the queue into cash and grid deals

The shortage is now showing up as cash. GE Vernova raised its 2026 free cash flow forecast to $16–17B, from $5.0–5.5B in January, helped by customer down payments. It bought the rest of Prolec GE in February and agreed in October to buy Trench Group, a high-voltage equipment maker, for $9B, closing in late 2027.^1,2,3

Competitors

Who else an investor would consider, and how they compare.

Company	Market value	What it does	Compared with GE Vernova
GE Vernovathis stock	$242.98B	GE Vernova, Siemens Energy and Mitsubishi Heavy have won about 90% of large gas turbine orders since 2015, and GE Vernova has the biggest fleet running. It also sells grid equipment and wind turbines.
Siemens EnergySMNEY	—	German gas turbine and grid maker whose wind faults forced a 2023 state guarantee.	Siemens Energy has the bigger grid backlog; GE Vernova dominates jet-engine aeroderivative turbines.^17,27,29,25
Mitsubishi Heavy IndustriesMHVYF	—	Large gas turbines, mostly for utilities in Japan and the U.S.	Mitsubishi led advanced turbines in 2022–23; GE Vernova retook first place in 2024.^18,22,25
Hitachi (Hitachi Energy)HTHIY	—	Transformers and high-voltage grid systems, backed by a $9B expansion plan.	Hitachi is a grid pure-play inside a conglomerate; GE Vernova pairs grid with generation.²⁰
CaterpillarCAT	—	Gas engines and generator sets that data centers install on site quickly.	Caterpillar sells smaller units that ship sooner; GE Vernova's big turbines take years.¹⁹
Bloom EnergyBE	$60.27B	Fuel cells that let data centers make their own power without waiting for the grid.	Bloom sells small on-site power fast; GE Vernova sells power-plant-scale turbines.²¹

Bull vs. bear: two bets on the same stock

1
A share is a small slice of the company. Its value comes from the profits the company will make in the future.
2
Nobody knows those profits yet. Buyers (bulls) pay today's price betting they'll beat what most people expect. Sellers (bears) bet they'll fall short.
3
When results come in, the price moves toward whichever side was right, and that side makes money.

The question they disagree on

Will GE Vernova keep signing more gas turbine capacity each quarter than it ships, about 5 gigawatts, through 2027?^{1,2,6,10,11,14}

Bull case: why buyers buy

If new contracts keep outpacing shipments, this year's higher prices reach earnings in 2028 and 2029, and the valuation recovers as financing fears fade.

Higher prices have barely reached profit. Third-quarter orders were priced over 20% above late 2025's, and management calls this the first quarter shipping better-priced turbines.
Demand is broader than AI. Management says about 80% of gas turbine customers are traditional buyers such as utilities, and about 20% are building for data centers.
Grid equipment is a second engine. Electrification's backlog reached $42.2B, including Prolec GE, the transformer maker it took full control of in February, and margin rose to 19.1%.
Customers pay up front, which funds buybacks. Down payments drove most of a $5.3B cash boost last quarter, and the buyback authorization doubled to $20B.

Bear case: why sellers sell

If AI financing worries slow new orders, reservations lapse and cash flow shrinks, and a stock at 35 times expected 2027 earnings (a forward P/E of 35) loses its premium.

Turbine booms have ended suddenly before. GE cut about 2,500 power jobs in 2002 when the last one ended.
Nearly half the queue is reservations, not orders. Of the 122 gigawatts under contract, 58 are slot reservations that have not yet become firm orders.
This year's cash includes deposits for future turbines. Analysts expect free cash flow (cash left after running the business and capex) to roughly halve in 2027.
Wind still loses money. It is about a fifth of sales, and management says it is hard to call a turn in U.S. wind orders.

Where Delphi landsbuyWe think the bull case is more likely than today's price assumes.See why

How real is 50%

The 50% price rise is partly product mix, and most of it reaches profit in 2028 and after

The headline figure is price per kilowatt across all gas orders. Strazik expects 2026 orders to price about 50% above 2025's on that measure. Part of it is mix: aeroderivatives, the small jet-engine turbines data centers use for quick power, cost more per kilowatt than big heavy-duty units. Third-quarter orders priced more than 20% above late 2025's, helped by that mix, and he expects fourth-quarter pricing per kilowatt to be lower.

The profit comes with a lag. Strazik said in December 2025 that gas equipment would earn little until the third quarter of 2026, when higher-priced orders began to ship, and that orders taken then would ship in 2029 or 2030. Older, cheaper orders ship first: 60% of the $104B equipment backlog, across all three segments, is due within two years.

The first repriced turbines are already visible. Power's equipment sales rose 72% from a year earlier while its services sales barely moved, and Power's EBITDA doubled. The 10-Q credits Gas Power's pricing and volume, partly offset by inflation.

What isn't disclosed: the dollar price of any turbine, or the margin in the backlog. Management will report the change in backlog margin in January, and that covers firm orders only, not slot reservations.^1,2,23,31

Power segment	Q3 2025	Q3 2026
Equipment sales	$1.67B	$2.86B
Services sales	$3.11B	$3.20B
Segment EBITDA	$0.65B	$1.30B
EBITDA margin	13.4%	21.4%, against a 2028 target of 22%

Where we landThe price rise is real but smaller than 50% like for like, and it is mostly 2028 to 2030 profit. That is why we value 2028 earnings. January's backlog margin is the test: a small gain would mean costs are eating the price.

What to watch

The numbers that will settle the debate.

Gas turbines under contract▲ improving

122 GW (64 GW orders, 58 GW reservations), up from 116 GW; 11 GW signed vs 5 GW shipped last quarter¹

Signings above shipments mean the queue, and pricing power, keep growing. Target: at least 130 GW by year-end.

Electrification segment EBITDA margin▲ improving

19.1% last quarter, up 4 points from a year earlier; backlog $42.2B^1,3

Shows whether grid equipment can carry growth if turbine orders slow. The 2028 target is 22%.

Wind segment EBITDA■ unclear

+$72M last quarter, but -$585M in the first nine months; $400–500M loss expected for 2026¹

Wind losses offset part of the gas profit. Breaking even would add directly to earnings.

Next earnings report

Jan 27

In 83 days

Expected earnings per share: $6.46
Expected revenue: —

What to listen for: The first 2027 guidance and how much margin sits in the gas backlog, which management promised to quantify on the January call.^2,10

What would prove this wrong

✕Gas signings fall below shipments for two quarters in a row.
✕Customers cancel slot reservations or stop converting them into firm orders.
✕January's backlog margin update shows smaller gains than 2026 pricing implies.
✕A large data center developer delays or cancels turbine orders.

Our ratingBuyMedium convictionas of Nov 2 close, $862.25 · what ratings mean

We agree with the 2028 consensus, and at 26 times it the model gains about 74% if we're right and loses about 7% if earnings disappoint.

12-month target: $1,176.08 (+36.4%)
S&P 500, same method, with dividends: +18.5%
Expected vs the market: +18.1 points

The math behind the recommendation

Three 12-month price scenarios, weighted by probability, compared with the S&P 500 under the same method.

Now $862.25

Target $1,176.08

bull case25% likely

$1,504.23 +74%

Signings keep beating shipments, January shows higher margins in the backlog, and 2028 earnings land near the top of forecasts as financing fears fade.

$37.24 earnings per share × 40.4 = $1,504.23

base case50% likely

$1,200.05 +39%

Gas contracts reach about 130 gigawatts by year-end, margins rise as repriced turbines ship, and 2028 earnings match the roughly $34 a share consensus.

$33.82 earnings per share × 35.5 = $1,200.05

bear case25% likely

$799.97 -7%

AI financing worries slow new orders, some reservations lapse, Wind keeps losing money, and 2028 earnings fall toward the low end of forecasts.

$29.47 earnings per share × 27.1 = $799.97

Why these odds: GE Vernova beat third-quarter estimates by 20% after a second-quarter miss and raised 2026 guidance again. But 2027 estimates are flat over 90 days, and AI financing worries put new orders at risk, so bull and bear odds are equal.

How the prices are built: Wall Street expects earnings per share of $33.82 for the year starting a year from now (analysts range from $25.12 to $40.65). Today the stock trades at 34.8 times next year's earnings per share; its five-year middle is 50.3. Because earnings per share is forecast to grow fast, valuations are cut 8%, since fast growth rarely keeps its price.^{2,6,10,11,12,13}

What tests the call: Q4 2026 earnings (date unconfirmed): first 2027 guidance, backlog margins, and a date for 2030 targets (Jan 27)

Buy means expected to beat the S&P 500 by 10+ points over 12 months; Sell means expected to trail it by 10+. Inputs gathered Oct 29; the recommendation updates with the price every day. Model-generated, not personalized investment advice. How ratings work · Track record

What the price assumes

At $862.25, investors pay 86% more than they pay for the average stock's earnings

GE Vernova trades at 35 times the earnings analysts expect over the next 12 months. That ratio is the multiple: what investors pay today for each dollar of a year's earnings. That is cheaper than it has been 80% of the time over the past five years, when the middle was 50.

Analysts expect earnings to grow about 37% the year after, against about 16% for the S&P 500. The S&P 500 trades at 19 times. The premium is a bet that GE Vernova's earnings keep growing faster than the market's for years, not just next year.

GE Vernova multiple: 35×
S&P 500 multiple: 19×
Base case: +39%
Bear case: −7%

The skewOur bear case loses about 18¢ for every $1 our base case makes. That ratio, how much you stand to lose against how much you stand to make, is the skew.

Whose cash is it

Customers have prepaid GE Vernova $45.7B, and this year's new prepayments exceed all of its operating cash flow

When a customer signs, GE Vernova collects cash long before it books revenue. That cash sits on the balance sheet as a contract liability, an obligation to deliver. These balances reached $45.7B in September, up from $26.0B at the end of 2025. Power's share doubled to $33.2B; part of the rest came with Prolec GE.

In the first nine months, the rise in these balances added $19.5B to operating cash flow, more than the $16.7B GE Vernova generated in total, because inventory and other items used cash. Cash on hand is $16.8B, after heavy spending this year on turbine inventory, the Prolec deal and buybacks.

The flow reverses as turbines ship. Each delivery turns cash already collected into revenue with no new cash attached, so free cash flow stays high only while new deposits outrun deliveries. That is why analysts expect free cash flow to roughly halve in 2027 even as EBITDA rises by about half.^31,1,11

Paid ahead of delivery: $45.7B
Nine-month inflow from prepayments: $19.5B
Free cash flow, 2026 to 2027: $15.8B → $7.7B

Where we landValue GE Vernova on earnings, not this year's cash. Much of the $16B to $17B is customers' money arriving early. If signings fell below shipments, cash flow would drop faster than profit, and we'd expect buybacks to slow first.

Last earnings

Q3 2026 results, reported Oct 28

Orders nearly doubled to $29.3B, backlog reached $197B, and GE Vernova raised its 2026 forecasts for revenue, margin and cash flow.^1,2,5,6,8,9

Reported Oct 28	Expected	Actual	Difference
Earnings per share	$4.02	$4.81	+19.7%
Revenue	—	—	—

Beat expectations in 4 of the last 7 quarters

Stock reaction: Down 1.9% that day, closing at $878.03

Why the stock moved

Positive: earnings per share beat by about 20%, and the full-year cash flow forecast rose by about $4.5B.
Weighing: Wind's 2026 loss forecast widened to $400–500M, from about $400M.
Weighing: the $9B Trench deal adds about $4.5B of debt and does not close until late 2027.
Context: AI stocks were already falling; GE Vernova dropped about 11% on Oct. 22, the day after Meta's results.

What it means for the stock: Strengthened the earnings case: contracts grew faster than shipments and prices rose. It did nothing for the valuation, which still moves with fears about AI financing.