1. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 92
GE Vernova Inc. (NYSE:GEV) offers a broad spectrum of offerings related to electricity generation, transmission, orchestration, conversion, and storage. The company emerged from the integration of General Electric’s divisions focused on power, wind, and electrification.
Cramer was originally worried about General Electric’s spin-off into 3 parts, which led to the formation of GE Vernova. However, he described the company’s transformation as “ugly duckling into dynamite squad”.
The company has a global footprint and an impressive installed base of over 55,000 units, which contributes to a consistent stream of service revenue. The firm’s current portfolio includes a substantial and expanding backlog of onshore and offshore wind development projects, anticipated to fuel steady progress in the coming years.
A clear sign of the company’s operational efficiency was seen in the offshore segment alone, as nearly $800 million from the backlog was successfully converted to revenue in the first half of the year. Cramer commented:
“Turns out, GE Vernova had nothing to worry about. In fact, the spin-off came at the perfect time. [The] stock was a home run, zooming 48.7% in the third quarter as power generation’s become a phenomenal growth story.”
GE Vernova (NYSE:GEV) has ambitious plans for its Power segment, aiming to ramp up production. It is pushing to deliver between 70 to 80 heavy-duty gas turbine units annually starting in 2026. It is a significant increase from the current output of about 55 units per year.
In the second quarter, the company’s Power orders surged by 30%, with equipment orders more than doubling compared to the same quarter last year. The quarter emerged as one of the most significant in terms of orders over the past three years, evidence of strong market interest and the company’s competitive positioning.
Furthermore, GE Vernova (NYSE:GEV) sees substantial growth in its Electrification segment. The company forecasts that its backlog of electrification equipment will exceed significantly by the end of 2024 from the $6.4 billion reported at the end of 2022. It is expected to be driven by a surge in demand for grid-related technologies.
Carillon Tower Advisers 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 potential of GE Vernova Inc. (NYSE:GEV) as an investment, 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 GEV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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