AI Power Boom: Why GE Vernova's $900M Hyperscaler Deals Matter

Here’s what’s flying under the radar: AI data centers are eating electricity for breakfast, and GE Vernova (NYSE: GEV) is basically the only shop that can feed them.

The Energy Math Nobody’s Talking About

U.S. electricity demand is projected to grow 2.5% annually over the next decade — that’s 5x faster than the previous 10 years. Sounds boring? It’s not. This is the infrastructure race that will define the 2020s.

GE Vernova operates turbines generating nearly 25% of global electricity. But here’s the kicker: hyperscalers (Meta, Google, Microsoft vibes) just ordered $900 million in gear from them this year alone — up 50% from $600 million last year. Q3 alone? $400 million. These aren’t casual purchases; these are bets on AI infrastructure dominance.

The Order Book is Turning Into a Pricing Machine

The company’s sitting on 62 GW of gas-power contractual commitments (up from 55 GW last quarter) and expecting to hit 70 GW by year-end. But here’s where it gets spicy:

• 29 GW in reservation agreements are priced higher than existing orders
• The company already knows future revenue per unit will be higher than past deals
• Translation: margin expansion before the turbines even ship

To meet demand, GE Vernova just deployed almost 200 new machines in factories and hired 800 workers. They’re targeting a 20 GW annualized production rate by next year.

The Valuation Elephant in the Room

Here’s the reality check: the stock trades at 87.3x forward EPS and 48.1x 2026 EPS. That’s… spicy.

Yes, the growth thesis is real. Yes, the order book is insane. But premium valuations leave zero room for error. One missed earnings target, one regulatory hiccup with natural gas, and this thing gets hammered.

The Verdict

GE Vernova has the moat, the orders, and the tailwinds from AI power demand. The business fundamentals are chef’s kiss. But the stock price is already pricing in most of that success story. If you’re buying, you’re betting on execution and that energy demand stays as hot as the servers it powers.

Wait for a pullback, or be ready to hold through volatility.