GE Vernova: Let There Be Power
A gas turbine and grid pure play riding a multi year profit and FCF supercycle on the back of generational load growth, reshoring, AI and electrification megatrends
Welcome to the 54th investment case, 44th Resilience & Quality, 31st Reshoring & Sovereignty, 27th AI & Technology and 17th Electrification & Energy idea on Crack the Market (and the most comprehensive GE Vernova investment case you will find online)! Join me as I dissect one of the most important companies in the world at the heart of the power bottleneck, an electrification champion (dominating power generation and distribution) and one of the best vehicles to play the generational inflection in load growth, grid investment supercycle and AI data center buildout megatrends.
Twice a week, I will release deep dives into stocks and sectors that fit into the 6 themes that I see winning in the coming years and decades: AI & Technology, Electrification & Energy, Reshoring & Sovereignty, Healthcare & Longevity, China & Asia, Resilience & Quality.
Take advantage of this once in a generation opportunity to build long term wealth by investing in great stocks that will deliver returns for your portfolio for years to come.
After reading this article, you will understand why GE Vernova stands out as one of the world’s most critical companies amidst the explosive supercycles in electricity demand, grid infrastructure and AI data centers thanks to its unmatched leadership in power generation and transmission across gas turbines, grid solutions and wind. You will understand exactly what it does and how it’s hitting an inflection point where surging demand meets pricing power to unlock incredible cash generation. Most importantly, you will grasp why this US electrification champion, with $150bn in long-dated backlog and decades of services visibility, remains one of the best compounders to own for the next decade.
In this article I go through:
GE Vernova’s business, its exceptional portfolio and how it dominates the gas power and grid sectors.
How the company is one of the purest ways to play the generational inflection in electricity demand, grid investment and AI data center buildout, with a $150bn record backlog anchored in Power and Electrification.
How the company is delivering a strong margin uplift and cash generation over the decade thanks to an incredible pricing power.
How GE Vernova is preparing to deliver a once in a lifetime demand wave with still under appreciated margin upside.
Why the market still underestimates GE Vernova’s margin ceiling and earnings power to 2030, and how pricing, mix and services can turn it into one of the strongest cash machines in global industrials.
GE Vernova Investment Case
Table of content
Business Description
GE Vernova is a machinery OEM focused on generating and managing high loads of electricity. GE Vernova was spun off from General Electric, one of the last great American conglomerates. In April 2024 GE’s Power and Renewables segments separated from the Aerospace business to form GE Vernova (GEV). The spin of GEV followed the spin of GE’s Healthcare business (GEHC) in January 2023 and represented the end of the original General Electric conglomerate. Since the spinoff, GEV’s core Gas Power and Grid Solutions businesses have seen tremendous fundamental tailwinds, aided by rising demand for electricity (driven by AI, electrification, reshoring) and an accelerating rate of global investment into grid infrastructure. GEV is one of the best pure-play ways for investors to get exposure to these megatrends. GE Vernova is a competitor of Siemens Energy, on which I wrote the most comprehensive deep dive here:
An electrical equipment pioneer which helps generate 25% of the world’s electricity:
While a new standalone entity, GE Vernova’s focus on electrification and power can be traced to the early days of General Electric, which was a pioneer in electric power when it began trading in the Dow Jones industrial average in 1896.
Through the years the company helped to advance the power industry with large-scale hydropower generation in the early 1900s, shipping the US’s first gas turbine for electricity production in 1949, operating the world’s first licensed nuclear power plant in 1957, and supplying the blades for the first offshore wind farm in 1991.
Now with an installed base of approximately 7,000 gas turbines and 57,000 wind turbines, GE Vernova’s technology helps generate about 25% of global electricity.
In 2025, GE Vernova is a €38.1bn revenues business with 8.4% adj EBITDA margin (+300bps yoy) and €3.7bn of FCF (+€2bn yoy). The company has a record backlog of $150.2bn (+$59.3bn in 2025) dominated by Power ($94.4bn) and Electrification ($34.7bn).
GE Vernova’s business is concerned with the value chain of power generation and distribution: from generation of power through wind turbines or gas turbines to the transportation and storage of electricity.
3 Core Segments and a diversified across gas power, wind power, and grid offerings:
Power ($19.8bn, 52% of sales): Gas Power (42% of sales), Steam Power (5% of sales), Nuclear Power (3% of sales), Hydro Power (2% of sales)
Electrification ($9.6bn, 25% of sales): Grid Solutions (17% of sales), Power Conversion (4% of sales), Software (2% of sales), Solar & Storage (1% of sales)
Wind ($9.1bn, 24% of sales): Onshore Wind (21% of sales), Offshore Wind (2% of sales), LM Wind (Blades, 1% of sales)
Breakdown by division (based on 2025 numbers):
Power (52% of sales, $19.8bn revenues, EBITDA 14.7% or $2.9bn): GEV’s Power division serves power generation, industrial, government, and other customers worldwide with products and services related to energy production. Their products and technologies harness resources such as natural gas, oil, diesel, water, and nuclear to produce electric power and include gas and steam turbines, full balance of plant, upgrade, and service solutions. Power sells large gas, steam turbines and generators (100-600 MW), Industrial gas turbines (4-100 MW), and a service offering of modernization, decarbonization and digitalization. GE Vernova is #1 market position in large Gas Turbines >100 MW.
2025 sales: $6.9bn equipment sales, $13.1bn services sales.
2025 backlog: $24.7bn equipment RPO, $69.7bn services RPO.
Gas ($16.0bn of sales): Heavy-duty turbines, aeroderivatives, heat recovery steam generators (produce steam by recovering energy from the exhaust of a gas turbine), generators, turbine & plant controls. Installed base of 7k gas turbines or >900 GW (as of 2022, >2x the nearest competitor). Services sales include outages, upgrades ($2bn annual sales, management expects to increase 50% by 2030), replace/repair. Service agreements have historically had a roughly 70% renewal rate, and about half of Gas Power services revenue is from long-term contracts ($70bn backlog), with the majority having 10+ years remaining.
Steam ($1.9bn of sales): Transitioned from a products and services business to focus exclusively on servicing the installed base of 3.6k steam turbines or 638 GW (as of 2022).
Hydro ($0.8bn of sales): 369 GW installed fleet of hydro turbines and generators, 26% of global generation (as of 2022). Offerings for new hydro plants, fleet services and modernization, pumped storage (moves water to higher elevation reservoirs to generate power later).
Nuclear ($1.0bn of sales): Through JV with Hitachi, leader in products (fuel), services (outages, inspection, life extension, power uprates), advanced nuclear design (SMRs).
Electrification (25% of sales, $9.6bn revenues, EBITDA 14.9% or $1.4bn): Electrification manufactures and installs equipment for the transmission of high-voltage electricity, mainly equipment used in substations. This includes switchgear, transformers, storage HVDC transmission systems, MVDC transmission systems, substations, circuit breakers, grid automation and services. GE Vernova is amongst the global leaders in HVDC installations/transformers, as one of the top three players alongside Hitachi and Siemens Energy.
2025 sales: $7.4bn equipment sales, $2.3bn services sales.
2025 backlog: $30.5bn equipment RPO, $4.2bn services RPO.
Grid Solutions ($6.6bn of sales): Includes HVDC to move power long distances through overhead lines or underwater cables, power transmission (circuit breakers, switchgear, transformers), grid automation (relays, gateways, energy mgmt systems, SCADA).
Power Conversion & Storage ($2.0B of sales): Systems for electrification of energy-intensive industries. Solutions for converting one form of power into another, like rotational mechanical energy into electrical energy via generators or electrical energy into mechanical energy via motors. Also converting one form of electricity into another, like between AC and DC, or from one voltage level to another. The portfolio focuses on marine, oil & gas, power, and industrial end markets. Power electronics that help integrate solar power onto the grid. Includes FLEXINVERTER to invert DC power from a utility-scale solar and voltage transformation, FLEXRESERVOIR for utility- scale energy storage, FLEXIQ for digital design, operations and fleet management.
Electrification Software ($1.0bn of sales): Software used from the generation of energy (power gen, oil & gas) through the delivery to customers (grid) and consumption in energy-intensive industries.
Wind (24% sales, $9.1bn revenues, EBITDA -6.6% or -$0.6bn): GE Vernova focuses on offshore and onshore wind turbines and services related to these products. Excluding Chinese players, GE Vernova is second in onshore (behind Vestas) and third in offshore wind (the fastest growing market segment, behind Siemens Energy).
2025 sales: $7.2bn equipment sales, $1.8bn services sales.
2025 backlog: $9.1bn equipment RPO, $12.5bn services RPO.
Onshore ($8.2bn of sales): GE Onshore Wind has an installed base of over 55k units (or 117 GW, as of 2022). Offerings include 3MW & 6MW turbines, repower (life extension), remote monitoring, services & upgrades.
Offshore ($0.6bn of sales): Installed base of 156 units (or 1 GW, as of 2022). Offshore includes the Haliade-X turbine (ranges from 12 to 18 MW) and services (predictive & preventive, upgrades & retrofits).
LM Wind Power ($0.2bn of sales): Has produced about 263k blades since 1978. LM supplies blades to GE Vernova and other OEMs.
Geographical mix - diversified geographically but more US:
US: 37% of revenues
Europe: 25% of revenues
Asia: 16% of revenues
Americas: 10% of revenues
Middle East and Africa: 12% of revenues
Business mix - very high quality mix with 45% services giving decades of visibility:
55% Products
45% Services
Comparison between GE Vernova and Siemens Energy:
To make things simple, GEV is a lot more US centric (and about to become more so as its gas equipment orders get converted to revenues and with its Europe centric Electrification business expanding in the US), which explains the valuation premium given the more pronounced megatrends in the country (AI data centers, reshoring). GEV is also the global leader in gas & steam turbines and services vs Siemens Energy who is leader in grid technologies.
