GE Vernova (GEV)

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.

You can't have data centres without power. Though the stock is expensive, this is a multi-year trend.

New highs again. AI is also about electricity, which is very important to a name like this. US data centres will drive about half the electricity demand growth from now until 2030, and this name is a direct beneficiary of that. Backlog of ~$160B (translates to roughly 4 years of revenue). 

Things are overbought, so measure your entry points. Midterms will bring volatility, so look for an entry that makes sense to you. Yield is 0.19%.

Great chart the past year: a rally, consolidation, then another advance higher. There's a lot of interest in power generation.

Drop is interesting buying opportunity, if not one that will blow the doors off. Backlog sold out for years, strong margin upside on servicing. Strong trends for years.

It matters whether you'll be buying this in a registered account, and whether you'll be converting CAD to USD. If the CAD climbs against the USD over next 5 years, could be a headwind.

Great visibility to earnings, but valuation is insane. Respect the chart -- you don't usually want to buy toward the top like that.

Makes power systems. Lots of demand for new power, especially with AI and data centres. Biggest business (and fastest-growing) is making gas turbines -- sold out over next 5 years. Demand for power isn't going away anytime soon. 

Clear leader. Remarkably resilient in current market, with strong RSI versus the market. Earnings up 200% for 2025, up ~100% for 2026. Estimate of 55% earnings growth in 2027. Estimates consistently go higher. Yield is 0.23%.