Is AI-driven Power Demand Aiding GE Vernova's Gas Power Business?

The growth of artificial intelligence (AI) and cloud computing has been significantly increasing electricity consumption of late, especially in hyperscale data centers worldwide. Surging electricity consumption is driving the need for a reliable and constant power supply, resulting in growing demand for power-generation equipment like those manufactured by GE Vernova Inc. GEV.To this end, GEV’s gas power business is witnessing notable traction in recent times, particularly in terms of growing gas turbine orders, which play a critical role in the energy transition industry. The company signed 7 gigawatts (GW) of gas turbine orders, raising its Gas Power equipment backlog to a solid 29 GW, with its gas turbine order registering an 11.8% year-over-year growth in first-quarter 2025. As the company continues to collaborate with major corporations through the supply of its advanced turbine technology and other power equipment, in a bid to meet the massive energy needs of the expanding digital economy, its Gas Power unit will continue to grow. Notably, this unit recorded year-over-year revenue growth of 17.7% in the first quarter of 2025. In April 2025, GE Vernova signed an agreement with utility provider, Duke Energy DUK, to provide up to 11 of its 7HA gas turbines and other associated equipment to support the latter’s electricity generation facilities. This order came in addition to the eight turbines of GEV that Duke Energy had previously acquired. In the same month, GEV entered into a partnership with energy giant Chevron Corp. CVX. Per the terms of the agreement, GEV will supply seven 7HA gas turbines that will help Chevron deliver 4 GW of power by 2027. CVX stands early in the queue to receive some of the largest gas turbines that GE Vernova manufactures, with the deliveries scheduled to start in 2026.  Looking ahead, with global electricity demand projected to double by 2050, as predicted by the International Energy Agency in 2024, GE Vernova’s Gas Power stands to benefit from the combined impact of tech-driven electricity consumption trends and strategic partnerships like those mentioned above.The Zacks Rundown for GEVShares of GE Vernova surged a solid 46.9% year to date, outperforming the industry’s 15.5% gain.Image Source: Zacks Investment ResearchFrom a valuation standpoint, GEV is currently trading at a trailing 12-month price-to-earnings (P/E) multiple of 52.69X, a roughly 148.5% premium when stacked up with the industry average of 21.20X.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for GEV’s 2025 and 2026 sales suggests a year-over-year improvement of 6.4% and 10%, respectively. The bottom-line estimate for 2025 and 2026 has moved north over the past 60 days. Image Source: Zacks Investment ResearchGEV currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chevron Corporation (CVX): Free Stock Analysis Report Duke Energy Corporation (DUK): Free Stock Analysis Report GE Vernova Inc. (GEV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks