GE Vernova (GEV)

An interesting name to put on your radar, as energy is one of the biggest bottlenecks for data centres. Capacity sold out to 2030, so any earnings surprises will come more from margin improvement. (Doesn't expect a beat on topline.) Definitely a critical provider to the buildout.

Good spot to be adding. Falling because of September swoon and interest rates, and investors fear we're past peak turbine cycle. Cancellation/deferral risk, inflation risk. The cycle is probably a lot longer than risks suggest. Adding output aggressively. 

Big beat last quarter. Insatiable demand near-term. One of the cleanest, data centre, growth, grid investment, electrification plays. Trades 28x PE, growing 43%. Buy it here.

Seeing a 65+% growth rate through 2028, but a lot of that's in the first year or so. Trading down at the 200-day MA. The AI infrastructure story continues very strong. Makes a lot of sense for power generation. Still buying for new clients.

Since June, still seeing higher lows despite the pullback -- an important distinction.

Power cycle is believed to be under some pressure. Exceptionally expensive. Don't forget that this went from losing money post-spinoff when the power cycle was ho-hum, to the greatest super-cycle we've seen in 3 decades. 

Sold out for the next year and the year after that. But are we going to need the same amount of nat gas demand in 2029-2030? Generally, he'd say yes. But the better way to play is with SI.

An industrial name to consider. More growth than HON.

Today, they reported a widely panned quarter and shares plunged 8.69%. It's been on a tear. GEV is used to power data centres. GEV reported a healthy revenue beat, but EPS fell short, missed in a big way. The story isn't earnings, but the expansion of gigawatts through turbine output. They have a $160 billion backlog, up $48 billion from a year ago and projects $200 billion by 2027. It plans to raise gas turbine output from 3 GW per quarter to 5 GW starting this quarter. That's 20 GW a year, then plan 24 GW in 2027, and 30 GW in 2030. They see the data centre as a generational opportunity. This gives GEV pricing (and earnings) power. However, the wind power division is weak with 40% fewer orders in Q2 and 11% less revenue. But they raised their free cash flow outlook and full-year revenue forecast.

The valuation reflects the 7-year wait list for their power turbines. It's a derivative of the wider AI trade, but there are better places to invest in.

They have a backlog to 2030. They are one of the biggest producers of gas turbines that they sell to utilities, with long service lives. They've benefited from the data centre build-out. Problem is, utilities are looking at other sources of energy, like renewables. Also, GEV's valuation is high. Doesn't know what the stock will do in the coming year, but will be correlated to similar stocks in the AI build out.

We'll see power and energy constraints develop over the next 5-10 years. Many of the power producers have capacity sold out to 2030. To get upside, they need to either increase capacity or reprice the backlog. Decent opportunity on margins, which are still below where they could be.

Likes it here. She could be interested on a pullback.

Their backlog of $200 billion will be obtained by end-2027. Last January, they said end-2028. That's how huge the data centre demand is.

In the right space to meet rising power demand of AI. About $163B in backlog revenue, which gives great revenue visibility. By 2030, half of US electricity demand growth will come from data centres. Order momentum climbing quickly. Not much competition. Yield is 0.22%.

Critical foundation of flexible, stable, and reliable power. Great run, more to go. Upside of 22% from here. Be patient right now. Don't be greedy, take profits along the way.