GE Vernova: The AI Power Stock with 96% Order Growth

GE Vernova (GEV), the power equipment spinoff from General Electric, reported a 96% year-over-year surge in total orders to $29 billion in its third quarter. This pushed its total backlog to $197 billion—more than four years' worth of revenue at its current run rate. The company expects backlog to exceed $200 billion by year-end.

The order growth was led by power-generating equipment, particularly natural gas turbines, which are in high demand as AI data centers require massive amounts of electricity. GE Vernova also makes wind turbines, grid equipment, hydropower solutions, and nuclear power tech.

Revenue for the quarter came in at $12.6 billion, up 18% organically year over year, continuing an acceleration that began in 2024. Electrification sales grew fastest, but power equipment orders drove the biggest dollar increase.

Despite the strong results, GE Vernova shares plunged last Wednesday along with other power stocks like Vistra and Bloom Energy after midterm elections gave Democrats control of Congress. Investors fear political headwinds for AI data center expansion.

However, the sell-off may be overdone. GE Vernova noted that only 20% of its power business comes from data center customers, with the remaining 80% from traditional utilities and other industrial customers that need equipment regardless of AI trends.

A 96% jump in orders is extraordinary for any industrial company, but it's especially significant for GE Vernova because it signals that the AI-driven power demand boom is real and accelerating. The $197 billion backlog provides exceptional revenue visibility for years to come, reducing earnings uncertainty.

The backlog also gives GE Vernova pricing power and the ability to be selective about which orders to accept, potentially boosting margins. Management expects backlog to keep growing even as it delivers on existing orders, suggesting demand remains robust.

While the market is worried about political risks to AI data center growth, GE Vernova's diversified customer base is a key strength. With 80% of its power business coming from non-data center customers, the company is not overly reliant on the AI boom continuing at its current pace.

The post-election sell-off appears to be a case of throwing the baby out with the bathwater. The election results are unlikely to materially impact GE Vernova's business, and could even increase demand for its efficient and environmentally friendly power solutions.

Analysts expect fourth-quarter sales of $14 billion, up 28% year over year, which would cap off a strong year and set the stage for continued growth in 2025 and beyond.