Growing demand for electricity from data centers creates a favorable environment for energy companies like GE Vernova.
GE Vernova is seeing significant demand for its gas turbines, and its backlog has surged.
The company is also developing next-generation small modular reactors.
A new era of energy security has begun, driven by the United States’ and other countries’ efforts to secure energy resources amid rising geopolitical tensions. At the same time, demand for electricity is surging from data centers powering the next generation of artificial intelligence (AI) algorithms.
Amid this growing energy crunch, GE Vernova (NYSE: GEV) is a particularly interesting stock for investors to pay attention to. The company continues to see robust demand, and its stock surged following stellar first-quarter earnings.
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If you have $5,000 to invest, here’s why GE Vernova could be the next pick-and-shovel stock for the global energy transition.
Image source: Getty Images.
GE Vernova manufactures and services power equipment and solutions that generate nearly one-quarter of the world’s electricity. As it stands, GE Vernova has a massive pipeline of profitable, recurring maintenance services, illustrated by its $87.4 billion services backlog at the end of last year.
The energy company’s competitive advantage lies in its integrated solutions and manufacturing scale. The company can bundle power generation with electrical grid equipment, providing an end-to-end solution for utility and hyperscaler customers. Last year was a huge one for GE Vernova, which signed over $2 billion in electrification orders for data centers, more than triple its orders from the year before.
GE Vernova is aggressively expanding its output to meet growing energy demands and aims to achieve an annualized production run rate of 20 gigawatts (GW) for gas turbines by mid-2026. These heavy-duty gas turbines can provide always-on, baseload power and can help address hyperscalers’ energy needs quickly.
The company also acquired the remaining 50% stake in Prolec GE for around $5.3 billion, giving it full ownership of the North American transformer and grid equipment manufacturer. At the end of 2025, GE Vernova’s backlog had grown to $150 billion, and by the end of the first quarter, it had grown by another $13 billion.
Looking further down the line, GE Vernova and Hitachi are partnering to deploy BWRX-300 small modular reactors (SMRs) in Tennessee and Southeast Asia. SMR development is currently a drag on GE Vernova’s earnings, and it doesn’t expect meaningful revenue from it until the 2030s.
However, given GE Vernova’s massive footprint in electricity and power, it’s one of the SMR developers that can navigate this longer timeline more effectively while it continues to pump out gas turbines and other power solutions.
Energy demand in the United States and around the world is growing, and GE Vernova is perfectly positioned to meet it. The company confirmed that it continues to see robust demand for its gas turbines and raised its revenue and free-cash-flow guidance for 2026, which sent the stock soaring following its earnings announcement.
For investors looking to capitalize on hyperscalers’ insatiable appetite for energy in the coming years, GE Vernova is a top pick-and-shovel stock that can help you capitalize on that growth.
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Courtney Carlsen has positions in GE Vernova. The Motley Fool has positions in and recommends GE Vernova. The Motley Fool recommends Hitachi. The Motley Fool has a disclosure policy.
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