1. GE Vernova (NYSE:GEV)
Number of Hedge Fund Holders: 92
Market Capitalization as of September 4: $54.81 Billion
GE Vernova (NYSE:GEV) has over 130 years of experience in the production of electrical equipment, natural gas turbines, wind turbines, hydropower turbines, and high-voltage electrical transmission products. The company plays a a crucial role in clean energy and its technology is used in around 55,000 wind turbines and 7,000 gas turbines across more than 100 countries which generate approximately 25% of the world’s electricity.
GE Vernova (NYSE:GEV) is uniquely positioned to benefit from several global megatrends, including the increasing demand for electricity, natural gas, and clean energy solutions. According to the International Energy Agency (IEA), global electricity demand is expected to grow by 4% in 2024 and 2025, up from 2.5% in 2023. This growth is largely driven by the electrification of transportation, including the adoption of EVs, and the rising need for power-intensive technologies such as AI systems. In their Q2 2024 investor letter, Carillon Tower Advisers stated the following regarding GE Vernova Inc.
“GE Vernova Inc. (NYSE:GEV) is a global electric power company that was recently spun out of a much larger industrial conglomerate. The company’s shares performed well in their first quarter as a standalone company, primarily as a result of the increasing outlook for power demand growth, both domestically and abroad. We believe GE Vernova is well positioned to capitalize on this growing trend across its various products and services, but most notably within its large-scale gas turbine equipment and related services, as well as in its high-voltage electrical transmission products.”
In Q2, GE Vernova (NYSE:GEV) reported a net income of $1.3 billion, a remarkable turnaround from a loss of $100 million in the same period the previous year. This represents a year-over-year increase of $1.4 billion, highlighting the company’s growing profitability. Additionally, GE Vernova’s (NYSE:GEV) net income margin increased by 17.4% year-over-year, due to improved operational efficiency. The company’s Power unit, which includes its gas and steam turbines, experienced a 30% growth in orders compared to Q2 2023. The backlog for GE Vernova’s (NYSE:GEV) electrification business grew by 35% year-over-year.
The global energy sector is expected to experience robust growth over the next several years. According to a report by Business Research Company, the market for electrical equipment is projected to grow at a CAGR of 6.1% from 2024 to 2028. Additionally, the International Energy Agency (IEA) forecasts that the installed capacity of wind power is anticipated to double between 2023 and 2029 which will further drive the demand for GE Vernova’s (NYSE:GEV) wind turbines and related products. As of the second quarter, GE Vernova’s (NYSE:GEV) stock is held by 92 hedge funds and the stakes amount to $5.70 billion.
While we acknowledge the potential of GE Vernova (NYSE:GEV) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than the stocks on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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