For all the hype surrounding artificial intelligence companies and the chips that power them, a new corner of the AI-driven economy is emerging: the surge in energy demand from data center buildouts.
GE Vernova (GEV) is meeting this demand in unconventional ways, leveraging natural gas turbines and nuclear facilities to generate, transmit, and store electricity.
GEV stock has quietly outpaced the broader AI rally, climbing 89% year-to-date and 235% over the past 12 months. GEV currently trades at an impressive $622 per share for a total market cap of $169 billion.
That momentum looked justified in July, when GEV’s second-quarter results crushed expectations. The company reported earnings of $1.86 per share on $9.11 billion in revenue, easily beating forecasts of $1.51 and $8.8 billion, respectively.
Amid the blowout results, William Blair analysts dubbed GEV the “best name” in AI power generation, pointing to its expanding role in energy infrastructure and dual exposure to gas and nuclear segments.
What some analysts may have underappreciated is the strength of GE Vernova’s order book. The company’s power backlog grew by 9 gigawatts in Q2, underscoring robust near-term demand for U.S. turbines.
The strong momentum prompted GEV’s management to raise its 2025 outlook, projecting revenue between $36 billion and $37 billion, with adjusted profit margins of 8% to 9%. The company also lifted its free cash flow forecast to as much as $3.5 billion, up from its prior target of $2.5 billion.
As InvestorsObserver reported, GE Vernova is extending its reach globally, with plans to deploy small modular reactors in Finland and Sweden in the 2030s. While those projects remain years away, the groundwork is already being laid.
Despite its success, analysts have struggled to pin down GEV’s true valuation and price potential, resulting in wide disparities in their targets.
GEV is trading at massive valuations
GE Vernova shares continue to attract strong support. Robert W. Baird analysts recently raised their price target by 24% to $706, while Susquehanna is aiming even higher at $746.
Not all analysts are as enthusiastic. Mizuho and Guggenheim have cautioned that GEV’s valuation looks stretched. “Gas and grid continue to impress, but downgrade to [Hold from Buy] on valuation,” wrote Mizuho analyst Maheep Mandloi.
The numbers back up those concerns. GEV trades at lofty multiples: its price-to-earnings ratio sits around 150x, far above the 30x industry average.
While GEV’s growth and leadership in energy transition markets are undeniable, such elevated valuations leave investors with little margin for error.
Guggenheim’s Joseph Osha offered a small silver lining to the valuation debate, noting that GEV looks “admittedly attractive if investors are willing to focus on 2029 and beyond.”
In the near term, however, Osha cautioned that it is difficult to view the stock as compelling from a risk-return perspective.
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