1. GE Vernova Inc. (NYSE:GEV)
Market Cap as of September 26: $70.30 billion
Number of Hedge Fund Holders: 92
GE Vernova Inc. (NYSE:GEV) is an energy company that provides a wide range of energy technologies and services. It is a subsidiary of General Electric Company, formed in 2023. Now it focuses on renewable energy, gas power, and energy storage solutions with a commitment to helping its customers transition to a cleaner energy future.
In Q2 2024, the company made $8.20 billion in revenue, up 2% year-over-year with continued strength in electrification and power, partially offset by the Wind revenue. Services revenue rose 9% with growth across all segments. The Power unit’s orders for gas and steam turbines increased by 30%, and the electrification business backlog grew by 35% year-over-year. It is now set to capitalize on the growing energy demand from the electrification of transportation and AI-driven electricity demand.
It had a significant installed gas generation capacity of 53 gigawatts in July. This made it a major player in the industry. The gas segment provides the company with a strong competitive advantage due to refurbishment revenue and a strong global brand. As an industrial product company, it also benefits from future cash flow visibility through order backlogs.
The International Energy Agency (IEA) forecasts a 4% increase in global electricity demand in 2024 and 2025, up from 2.5% in 2023. This growth is fueled by the electrification of transportation, like electric vehicles, and the rising demand for power-intensive technologies such as AI systems.
GE Vernova Inc.’s (NYSE:GEV) innovative application of AI for efficient power management and autonomous inspections further strengthens its competitive advantage in the market. It is also expanding its portfolio of onshore and offshore wind (clean energy) projects. It’s not limited to wind energy and participates in the broader transition towards lower carbon energy solutions as well.
Carillon Eagle Mid Cap Growth Fund stated the following regarding GE Vernova Inc. (NYSE:GEV) in its Q2 2024 investor letter:
“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.”
While we acknowledge the growth potential of GE Vernova Inc. (NYSE:GEV), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GEV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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