After a strong performance in 2025, GE Vernova (GEV) stock is set to rise in 2026. GEV stock is up 34% so far this year and most recently hit a record high of $894.93 on February 25. Over the past 12 months, the stock has risen nearly 160%, driven by increased demand for electricity.
GE Vernova provides power generation equipment and services, grid solutions, and energy storage systems. Demand for these offerings is accelerating as investment in artificial intelligence (AI) infrastructure, particularly in data centers, continues to increase. At the same time, the constant power of transportation and commercial buildings increases electricity consumption. In addition, the broader shift toward cleaner, more resilient energy systems is also driving a multi-year investment cycle in power infrastructure, creating continued growth opportunities for the company.
The company’s expanding backlog and strong margins provide a solid basis for growth in 2026 and beyond, boosting investor confidence. Adding to the positive outlook, GE Vernova announced plans to double its dividend in 2026 compared to 2025 and increased its share repurchase authorization to $10 billion from the previously approved $6 billion.
With accelerating demand and remaining aligned with pricing trends, GE Vernova is well positioned to deliver continued growth, strengthening its investment case.
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GE Vernova is on a strong growth path, driven by continued momentum in the power and electrification segments. In 2025, orders rose 34% organically to $59.3 billion, driven by strong demand for equipment in both the power and electronics segments, with steady service growth in these segments. The increase pushed the total backlog to $150 billion, providing a significant revenue outlook.
Revenues for 2025 increased 9% year-over-year (YOY) to $38.1 billion, driven by strength in electric and gas power. Most importantly, profitability has improved significantly. Margins expanded meaningfully, supported by higher price realizations, volume increases, and operational productivity gains.
Supporting its profitability is a significant expansion in equipment backlog margin dollars. GE Vernova has added $8 billion in equipment backlog margin by 2025, more than the previous two years. Equipment backlog ended the year at $64 billion, up nearly 50% YOY, with a six-point improvement in equipment margin. Within power, margins increased by 11 points, largely due to strength in the gas power business.
Management expects this trend to continue in 2026. High-priced gas slot reservation contracts are set to turn into orders, while demand for grid equipment remains strong. Operationally, the company continues to focus on variable cost manufacturing, lean manufacturing, and capacity expansion. Gas turbine generation capacity will increase to around 20 gigawatts per year by mid-2026, positioning the company to capitalize on continued demand. At the same time, the electrification situation is expected to benefit from price and volume, as well as from the integration of the Prolec GE acquisition.
Guidance for 2026, now including the Prolec GE acquisition, reflects increased confidence. Revenue estimates range from $44 billion to $45 billion, up from the previous estimate of $41 billion to $42 billion. Adjusted EBITDA margins are expected to widen to 11% to 13% in 2025, compared to 8.4% in 2025, as a higher price backlog turns into revenue and execution improves. Earnings are expected to be weighted towards the second half, with the fourth quarter representing the highest revenue and EBITDA.
Looking further ahead, GE Vernova raised its 2028 outlook. The company is now targeting revenue of at least $56 billion by 2028, implying a lower teenage compound annual growth rate (CAGR) than current levels. Adjusted EBITDA margins are expected to reach 20%, more than double the 2025 level.
With rapid expansion, improving margins, and rising cash generation, GE Vernova is well positioned to deliver continued, profitable growth, which could provide meaningful support for its share price.
GE Vernova’s rally to record highs is supported by strong demand and rising profits. Order growth, a $150 billion backlog, expanding equipment inventory, and increased guidance for 2026 and 2028 indicate strong earnings.
Looking ahead, strong demand trends, accelerating free cash flow, dividend growth, and expanding buyback options continue to support potential.
After a strong rally, investors may consider locking in partial gains. However, GEV stock’s underlying growth trajectory suggests that this momentum is likely to continue. This means that investors may want to hold onto GEV stock and let it run.
Analysts are also bullish on GEV stock, maintaining a “strong buy” consensus rating.
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As of the date of publication, Amit Singh did not hold positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
