GE Vernova shares trade at $890 each, with a $237 billion market cap, after a steep pullback from recent highs. Its October 28 third-quarter results showed organic orders up 96% year over year, a $197 billion backlog and $5.4 billion in free cash flow, while the Power division booked nearly $22 billion in orders, up 178%. The company has not split its stock since separating from its parent in 2024, and management has focused on buybacks, raising its repurchase authorization from $10 billion to $20 billion in October. The author does not expect a split unless the price stays above $1,000 for an extended period, and says a split is not necessarily a reason to invest, though the fundamentals are strong.
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- Why GE Vernova Stock Fell on Friday
GE Vernova shares fell as much as 4.9% in Friday's trading despite strong third-quarter results, with revenue up 27% year over year and orders surging 96% organically, amid an AI infrastructure stock sell-off. Backlog rose $20 billion to a record $197 billion, and management expects it to top $200 billion in the fourth quarter. The company will acquire Trench Group for $9 billion, funding half the price with debt, and several analysts cut price targets, including TD Cowen to $1,125 from $1,235 and Jefferies to $1,100 from $1,185. The analysts are not bearish on the stock but are concerned about conversion timing and limits on margin expansion. Management raised full-year guidance, lifting free cash flow at the midpoint to $16.5 billion from $12 billion, and doubled its buyback authorization to $20 billion.
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GE Vernova reported third-quarter orders of $29.3B, up 96% organically, with backlog rising to $197B, and raised its 2026 guidance. Third-quarter gas turbine orders were priced more than 20% above fourth-quarter 2025 orders, lifting Power's EBITDA margin to 21.4%, and management expects at least 130 gigawatts under contract by year-end, up from 83 gigawatts at the start of the year. Free cash flow guidance rose to $16B-$17B from $11.5B-$12.5B, and the buyback authorization doubled to $20B. On the other side, Electrification orders fell 9% organically, Wind is guided to an EBITDA loss of $400-$500M, and the $9 billion Trench Group deal requires roughly $4.5 billion of new debt. The stock fell 1.83% on the day and 7.43% over the past month, and the average analyst target of $1,223.97 across 37 analysts implies about 39.3% upside.
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Vertiv and GE Vernova, both suppliers of AI data center infrastructure, beat Wall Street estimates in their third-quarter reports. Vertiv's revenue rose 61% year over year and it expects 38% organic growth for the full year, while GE Vernova's revenue rose 27% and its orders jumped 96% organically, with full-year revenue guided up 22%-25%. Both stocks remain well below their all-time highs from earlier this year (45% and 24% respectively), after the Fed raised benchmark rates for the first time in three years this September. Vertiv faces supply constraints and possible margin pressure from its UtilityInnovation Group acquisition, while GE Vernova's Wind segment remains weak and its planned Trench Group deal could compress margins. The author expects Vertiv's EPS to grow faster (49% CAGR vs 24% from 2025 to 2028) and notes it trades at 25 times next year's earnings versus 37 times for GE Vernova, so if forced to choose one, the author would pick Vertiv.
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GE Vernova shares fell on Wednesday despite the gas turbine maker beating expectations and raising its full-year outlook. Third-quarter revenue rose about 27% to $12.64 billion, above the $11.99 billion LSEG estimate, while EPS jumped 193% to $4.81 versus a consensus of $3.94. The company also agreed to buy Trench Group, a privately held maker of electric-grid equipment. The sell-off appears linked to guidance that fourth-quarter gas turbine pricing per kilowatt will be below third-quarter levels and to uneven quarterly growth in Gas Power in 2027, even as backlog rose from 116 GW to 122 GW and management expects 130 GW by year-end. The author argues the decline is too critical and does not reflect the company's underlying business strength.
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