Stuck on the "AI Power Neck"! The "Gas Turbine Giant" GE Vernova's stock price hits a new high, rising over 500% since early 2024.

As AI data centers drive up electricity demand, gas turbines have become a critical bottleneck. The capacity shortage among gas turbine manufacturer GE Vernova has evolved into a “pre-order bidding war,” with clients required to pay non-refundable deposits four years in advance for deliveries in 2030. Gas turbine manufacturing is experiencing a rare boom cycle.

The company’s stock hit a new high on Monday, with a cumulative increase of over 500% since its spin-off from GE Aerospace at the beginning of 2024.

On Monday, Canadian power producer Maxim Power announced a sales reservation agreement with GE Vernova to “reserve a manufacturing slot for a 7HA.02 gas turbine and generator set.” Under the agreement, Maxim must pay a non-refundable deposit by 2026, with the specific turbine price to be negotiated later.

This model of paying deposits upfront to secure a place, then negotiating prices later, reflects the supplier’s strong position in the market.

GE Vernova CEO Scott Strazik stated on January 28 that by the end of this year, the company’s backlog is expected to reach 100 gigawatts, with production capacity for 2029 and 2030 essentially sold out.

Market supply and demand imbalance is directly reflected in the stock price performance. GE Vernova’s stock rose 2.9% on Monday, closing at $801.54, reaching a 52-week high intraday. The surge in power demand has also led Wall Street to significantly upgrade earnings forecasts, with analysts now expecting the company’s 2030 EBITDA to approach $17 billion, up from around $9 billion a year ago.

Capacity Tightness: Backlog Approaching Production Limits

GE Vernova’s capacity crunch has reached unprecedented levels. By the end of 2025, the company’s gas-fired power backlog will reach 83 gigawatts, while this year’s annual capacity is only expected to increase to 20 gigawatts. Based on this, existing orders already fill the production line for more than four years.

Pre-order and deposit-based models are standard for GE Vernova, but the company is selling out its capacity for the end of this decade at an accelerated pace. From 83 gigawatts to an expected 100 gigawatts by year-end, this means an additional roughly 17 gigawatts of orders in 2026—equivalent to nearly a year’s worth of the company’s capacity.

Earlier this month, Xcel signed a “milestone strategic alliance agreement” with GE Vernova, including the purchase of five F-class power turbines. Notably, these turbines are not included in the 83-gigawatt backlog announced on January 28, indicating new orders are still pouring in.

AI Data Centers as Demand Drivers

The accelerated growth in power demand is driven by energy-intensive AI data centers. These facilities’ need for stable, large-scale electricity supply is fueling a boom in traditional power infrastructure expansion.

Gas turbines, capable of providing stable base load power, have become key equipment supporting AI infrastructure. Compared to the intermittency of renewables, gas-fired generation can provide 24/7 uninterrupted power, which is critical for data center operations.

Market tension is everywhere. Power producer Maxim Power’s willingness to lock in capacity four years early and pay deposits reflects concerns about future supply shortages. Customers are shifting from passive waiting to actively securing manufacturing slots.

Earnings Expectations Surge

The supply-demand imbalance is translating into pricing power advantages. Higher demand could lead to higher prices, boosting profitability. Wall Street’s earnings forecasts for GE Vernova have doubled over the past year, with 2030 EBITDA expected to reach about $17 billion, significantly up from around $9 billion a year earlier.

Stock performance confirms market confidence. On Monday, GE Vernova’s stock rose 2.87% for the day, up 102% over the past 12 months. The same day, the S&P 500 rose 0.5%, and the Dow Jones Industrial Average was flat.

As a dual beneficiary of energy transition and AI infrastructure development, GE Vernova is experiencing a rare boom cycle. When clients pay deposits four years in advance for deliveries, the supplier’s position in the industry chain is evident.

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