GE Vernova Stock Is Falling. Amazing Orders Didn’t Help.

GE Vernova makes power generation equipment, including wind turbines. Coming into Wednesday trading, GE Vernova stock was up 78% this year. (Courtesy GE Vernova)

Key Points

• GE Vernova’s third-quarter Ebitda of $811 million beat analysts’ estimates.
• Orders in the quarter rise 55% to $14.6 billion
• GE Vernova maintains full-year 2025 guidance for Ebitda of roughly $3.2 billion from sales of between $36 billion and $37 billion.

GE Vernova reported better-than-expected third-quarter earnings on Wednesday, with sales and new orders looking strong.

Investors initially cheered, but then sold shares, with some other AI-related profit-taking in the market.

The maker of power equipment reported quarterly earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $811 million from sales of $10 billion. Wall Street was looking for Ebitda of $787 million from sales of $9.1 billion, according to FactSet.

A year ago, in the third quarter of 2024, GE Vernova reported Ebitda of $243 million from sales of $8.9 billion.

GE Vernova maintained full-year 2025 guidance for Ebitda of roughly $3.2 billion from sales of between $36 billion and $37 billion. Wall Street currently projects 2025 Ebitda of $3.4 billion. Guidance implies fourth-quarter Ebitda of about $1.2 billion. Wall Street estimates are closer to $1.3 billion.

The roughly $100 million gap might concern investors, but orders were strong, coming in at $14.6 billion, up 55% year over year, and much better than the $12.4 billion forecast by BofA Securities analyst Andrew Obin.

“The growth trajectory of the business is accelerating,” CEO Scott Strazik tells Barron’s, noting that GE Vernova added about $7 billion to the company’s backlog over the past 90 days. What’s more, the new business is more profitable than orders being filled today. “We’re going into a growth phase…that will be stronger for longer.”

GE Vernova is adding capacity to produce about 20 gigawatts of gas power equipment in 2026, up from its current capacity of closer to 15 gigawatts.

Shares traded as high as $609.54, but slid back to $576, down 1.6%. The S&P 500 and Dow Jones Industrial Average dropped 0.5% and 0.7%, respectively.

Results needed to clear a high bar. Coming into Wednesday trading, GE Vernova shares were up about 78% this year, boosted by the boom in artificial-intelligence computing, which is pushing up electricity demand.

Other AI-related stocks faced a similar pattern, with investors selling after big gains. Shares of Amphenol, another company benefiting from the AI boom, traded as high as $135.94 after reporting blowout third-quarter numbers on Wednesday, before sliding back to $128.93, up 3.6%. Coming into the day, Amphenol stock was up 79% year to date. Nvidia stock dropped 0.5% on Wednesday.

Along with strong sales and earnings at GE Vernova, profit margins increased across all businesses. Ebitda margins in gas power rose to 13.3% from 11.9% a year ago. Electrification margins hit 15.1% up from 10.4%. Wind Power margins were negative 2.3%, but that improved from negative 11% a year ago. The offshore wind business continues to be a challenge, and GE isn’t signing new orders for that business.

Electrification margins should get another boost from M&A. Along with the results, GE Vernova announced plans to acquire the 50% of the GE Prolec electrical transformer business that it doesn’t already own from Mexico’s Xignux.

The business is expected to generate $3 billion in 2025 sales with Ebitda profit margins of 25%. GE Vernova will pay $5.3 billion, paying about 14.4 times the estimated 2025 Ebitda for the portion of Prolec it is acquiring—or more impressively, less than 10 times expected 2026 Ebitda. The deal will be funded with cash and debt and is expected to close in 2026. Currently, GE doesn’t consolidate the results of Prolec. That will change when it owns all of the subsidiary.

The deal gives GE Vernova’s fastest-growing segment a boost, expanding its product lineup of transformers. Sales hit $2.6 billion in the third quarter, up 35% year over year. Orders came in at $5.1 billion, up 104%.

The business is firing on all cylinders, which has pushed the company’s valuation higher. Coming into Wednesday trading, GE Vernova stock was trading for about 47 times estimated 2026 earnings, up from about 31 times early in 2025.

Right now, valuation seems to signal the biggest challenge for the business: Meeting high investor expectations.

Options markets recently implied that shares would move about 6%, up or down, following earnings. Shares have risen an average of about 5% over the past four quarterly reports. One of those gains was a 14.6% jump in July after the company reported better-than-expected second-quarter numbers.

Write to Al Root at allen.root@dowjones.com