In late 2021, investors cheered General Electric's (GE -1.45%) decision to split itself into three public companies. However, by the middle of 2022, the market had soured on GE. After peaking above $110 following the breakup announcement, GE stock slid all the way to $60 -- a level not seen since the early days of the COVID-19 pandemic -- by July 2022.

Investors have regained their enthusiasm for the breakup in 2023, as GE stock has roared higher. In fact, shares of General Electric -- and its GE Healthcare Technologies (GEHC 0.68%) spin-off -- have more than doubled in value in the last 11 months. The upcoming spin-off of GE's energy businesses could enable further gains in 2024.

Investors lose faith

General Electric couldn't seem to catch a break in 2022. In its first-quarter earnings presentation, the company highlighted a slew of near-term challenges it was facing, including high inflation, the Russia-Ukraine war, and supply chain constraints. These factors slowed the aerospace unit's recovery and pressured margins in the healthcare unit all year.

Meanwhile, the renewable energy business struggled throughout 2022. For the full year, it reported a $2.24 billion operating loss and burned $2 billion of cash on a 17% revenue decline. This fell far short of management's expectations entering the year.

These headwinds and fears about whether conditions could worsen likely explained why GE stock plunged from around $100 in January 2022 to as low as $60 six months later.

A spectacular run

Fortunately, many of these business pressures faded as 2022 progressed. By the fourth quarter, all GE's main business units, other than renewable energy, were reporting year-over-year profit growth. This helped GE stock begin recovering in the second half of 2022.

The spin-off of GE Healthcare in early January turbocharged this momentum. Within less than a month of the spin-off becoming official, shares of both GE and GE Healthcare rose more than 20%. And GE stock has continued to climb thanks to strong Q1 results, a favorable aviation demand backdrop, and bullish medium- and long-term forecasts the company released at its investor day in March.

Indeed, GE stock ended last week at $106.30, just shy of the new 52-week high it set on Wednesday. That's up more than 75% from where it bottomed out last July.

Moreover, in conjunction with the healthcare spin-off in early January, GE shareholders received one GE Healthcare share for every three GE shares they held. GE Healthcare stock currently sits at $77.10. That equates to $25.70 for a third of a share. Adding that to the current GE stock price, shareholders who have held both stocks now have $132 of value for every pre-spin-off GE share -- up 120% in 11 months. GE stock last traded at that level in early 2018.

One more catalyst

Today, GE has a market cap of approximately $116 billion, which is at least in the ballpark of its intrinsic value. Even so, the upcoming spin-off of GE Vernova -- which will encompass the company's power and renewable energy segments -- could unlock a little more upside.

While GE's energy-related businesses generated nearly $30 billion of revenue last year, they were collectively unprofitable and cash-flow negative. So far, 2023 is shaping up to be only slightly better. Management expects profitability and cash flow to improve dramatically next year, but considering GE's recent track record in these business segments, investors could reasonably be skeptical of the company's targets.

In short, the power and renewable energy units have weighed heavily on GE's valuation in recent years, and that is probably still the case. GE Aerospace -- a fairly predictable high-growth, high-margin business -- will be much more appealing to many investors once it is independent of these less stable businesses. That could lead to a higher valuation for GE stock in a year or two, rewarding patient shareholders.