GE Vernova Stock Was Up 90% This Year. Why Its Investor Event Sent It Higher.

Coming into Tuesday trading, GE Vernova stock was up 89% this year. (VINCENT KESSLER/AFP via Getty Images)

Key Points

• GE Vernova projects 2026 revenue between $41 billion and $42 billion, with Ebitda profit margins of 11% to 13%.
• The company updated its 2028 guidance to $52 billion in revenue and 20% Ebitda profit margins, up from prior forecasts.
• Expectations were high coming into the event. It looks as if the company cleared the bar.

GE Vernova has become a hot derivative play on the growing demand for electricity from power-hungry AI data centers. Company management met with investors in New York City on Tuesday to discuss its future.

It looks bright. Expectations were high coming into the event, and it looks as if the company cleared the bar.

For starters, the company provided initial financial forecasts for 2026. GE Vernova expects revenue of $41 billion to $42 billion and Ebitda profit margins of between 11% and 13%, implying 2026 earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $4.5 billion to $5.5 billion. Wall Street currently projects revenue of $41.6 billion and Ebitda of $5.3 billion.

The Ebitda figure might look a little light relative to expectations, but the guidance is despite a persistently weak wind-power business.

Then there is 2028. For that year, Vernova expects revenue of $52 billion and 20% Ebitda profit margins, implying Ebitda of more than $10 billion. Wall Street projects 2028 revenue of $52.8 billion and Ebitda of $9.4 billion.

GE Vernova’s prior 2028 guidance called for revenue of $45 billion and 14% Ebitda profit margins. Things have gotten much better. Higher demand and improved pricing have driven the improvement.

BofA Securities analyst Andrew Obin expected GE Vernova to raise Ebitda profit margin guidance closer to 16%. He currently projects 2028 Ebitda of $8.9 billion.

Oh, and the quarterly dividend is going to 50 cents, doubling from 25 cents.

GE Vernova rose 15.6% to $723 on Wednesday, a record close, while the S&P 500 and Dow Jones Industrial Average gained 0.7% and 1.1%, respectively. Coming into Wednesday trading, GE Vernova’s stock was up 90% this year.

Investors are reacting with relief. Nothing much is wrong at the company, but with Wall Street, solid performance tends to send expectations through the roof.

Business execution by Vernova management has been excellent since the company spun out from GE Aerospace in early 2024. Ebitda profit margins have gone from roughly 6% to 8% over the past year, while sales have grown by double-digit rates.

Coming into Wednesday, GE Vernova stock traded for about 31 times estimated next year’s Ebitda, up from about 16 times shortly after the spinoff. What’s more, analyst projections for 2026 Ebitda have risen to $5.3 billion from $3.7 billion over that span.

All that means is the company had to deliver something special to see the stock move higher. Along with guidance, GE Vernova said it expects to increase gas turbine capacity to 24 gigawatts a year in 2028, up from a 20-gigawatt run-rate in 2026. GE Vernova should have 80 gigawatts of contracts signed by the end of the year. That’s more than three to four years of work at current build rates. And prices for new contracts are better than prices reflected in the current backlog.

There isn’t much to complain about.

Obin rates GE Vernova shares Buy and has a $725 price target. Overall, 68% of analysts covering GE Vernova shares rate them Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for GE Vernova stock is about $689 per share.

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