GE Vernova: The Energy Giant Powering a Multi-Year Stock Surge

Key Points

• GE Vernova is up 181% since the company’s initial public offering in April 2024.
• The company’s power unit keeps the company well positioned for the buildout of data centers with natural gas solutions today and nuclear energy solutions in the future.
• With GEV stock near a new all-time high, investors may want to wait for a pullback before taking a new position.  

Many investors were focused on technology stocks like NVIDIA Corp. NASDAQ: NVDA and Palantir Technologies Inc. NASDAQ: PLTR in 2024. That means you may have missed the run-up in GE Vernova LLC NYSE: GEV. Energy stocks, in general, lagged the market. Still, GE Vernova, which is a spinoff of its parent company, General Electric Corp. NYSE: GE, is up 181% since making its debut as a publicly traded company in April 2024.

Growth like that, particularly as we start a year where volatility is expected to continue, may have some investors looking to take profits. If they do, and maybe even if they don’t, GEV stock is a name to consider if you’re looking for slow, steady growth. 

Natural Gas Now, Nuclear Later? 

As the proverb goes, necessity is the mother of invention. In 2025, the necessity is being brought about by the growing demand for artificial intelligence (AI) applications. That will require data centers, which will require massive amounts of power.

However, there are currently few options for delivering this power cheaply and cleanly. For now, natural gas is one of the cleanest options available. In late 2024, GE Vernova signed multiple contracts for natural gas turbines to power large data centers. Some of the 5-gigawatt campuses are expected to begin operations in 2028.

While the company does not offer carbon capture solutions today, it plans to make significant investments in the technology in 2025, which it believes will pay off when the companies running these data centers are ready to use the technology, which may not be for about five years.

GE Vernova is also a way to invest in the growing trend toward nuclear energy. The company’s GE Hitachi Nuclear Energy Alliance can provide reactors, fuel, services, and steam turbines needed for electricity generation. 

A Chip Off the Old Block

For decades, General Electric carefully built a reputation as a shareholder-friendly company. In December 2024, GE Vernova made two announcements highlighting the company’s apparent intention to follow in its parent company’s footsteps regarding shareholder equity.

First, the company announced a $6 billion share buyback authorization. GE Vernova also announced its first quarterly dividend payment. On December 20, 2024, shareholders will receive a 25-cent per share dividend on January 28, 2025. 

This commitment to shareholders is not just a one-time event. The company forecasts over $14 billion in free cash flow generation in the next four years. It plans to return at least one-third of that to shareholders through buybacks or dividends. With no net debt as it enters 2025, GE Vernova is giving investors a reason to own the stock even with a premium valuation of 163x forward earnings. Another reason is the analysts’ expectations of approximately 46% earnings growth in the next few years. 

Getting Involved With GEV Stock

The analyst forecasts on MarketBeat give GE Vernova a Moderate Buy rating. The consensus price target of $314.35 is 15% below the stock’s January 7, 2024 price. However, several analysts tracked by MarketBeat are giving GEV stock much higher price targets, including Wells Fargo & Co. NYSE: WFC, which has a $411 price target, and Barclays, which has a target of $420.

Analyst ratings aside, after its strong debut in 2024, it’s likely that there will be some pullback in GEV stock in 2025. The latest bump in the GEV stock price pushed it past a resistance level at around $350. Therefore, if you’re not in the stock, you may want to wait for a meaningful pullback before taking a meaningful position. However, if you believe in the long-term potential of GEV stock, you can start to nibble on the stock now and use any correction as an opportunity to buy with more conviction.