GE Vernova Has More Than Doubled This Year. Why It Was the Worst Stock in the S&P 500 Today.

A GE Vernova MW turbine in New Mexico. (Courtesy GE Vernova)

Key Points

• GE Vernova stock declined 11% in midday trading due to investor concerns over a new AI chip start-up, Mystic.
• The percentage of analysts rating GE Vernova stock as “Buy” has increased from 64% to 68% in the past week.
• The average analyst price target for GE Vernova stock rose to approximately $739 from $681 a week ago.

Santa delivered some coal early for investors in the power-generation and technology company GE Vernova .

GE Vernova stock fell 11% on Wednesday, making it the worst-performing stock in the S&P 500 . The S&P 500 and Dow Jones Industrial Average lost 1.2% and 0.5%, respectively.

Jitters about artificial intelligence look like the reason for the steep decline. A chip start-up named Mystic has created worries similar to the DeepSeek situation encountered earlier this year. That is apparently all it took to catalyze the selloff.

Created with Highcharts 9.0.1GE VernovaSource: FactSetAs of Dec. 17

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The company raised $125 million in a new round of funding. While that is a tiny amount of money relative to the sums being spent on AI, Mythic is trying to design AI chips that use less power.

Rising demand for electricity, the result of the buildout of power-hungry AI data centers, is the biggest reason for increased optimism about GE Vernova stock.

AI has been great for GE Vernova stock, which has more than doubled this year, but the shares are vulnerable to any AI tantrums the market might have.

The Mystic situation is a little like the DeepSeek problem Nvidia and the AI sector faced in January. At that time, a Chinese AI model was apparently producing good results with cheaper chips that use less power.

DeepSeek sparked conversations about the Jevons paradox: Cheaper tech leads to more demand, which leads to more spending on the tech. That helped soothe investors’ fears and got the market over the DeepSeek threat.

History appears to have repeated itself on Wednesday. Utilities Constellation Energy and Vistra were down 6.7% and 7.8%, respectively. Electrical infrastructure provider Quanta Services was down 5.5%. Oracle and Nvidia shares were off 5.4% and 3.8%, respectively.

Beyond the broader AI concerns, there isn’t much to pin GE Vernova’s decline on. There were no downgrades or price-target cuts from Wall Street. In fact, Wall Street is more bullish on shares than it was only a week ago.

Today, 68% of analysts covering the stock rate the shares at Buy, according to Bloomberg. The average analyst price target for GE Vernova stock is about $739. About a week ago, before the company held an analyst event in New York City, 64% of analysts rated shares Buy. The average price target was $681.

How GE Vernova stock will continue to react to Mythic or Mythic-like news is hard to say. Cheap, efficient technology is never really a bad thing.

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