GE Vernova (GEV -1.33%) stock jumped by 6% through 11:52 a.m. ET Tuesday, and it's not hard to guess why.
After the closing bell on Monday, tech giant Oracle (ORCL -5.09%) reported an earnings miss for its fiscal 2026 first quarter, but offered strong guidance that sent its stock up by more than 41% Tuesday morning. That upbeat outlook prompted investors to look up the artificial intelligence supply chain, from Oracle, which does AI work, to the electric utilities that feed power to AI data centers ... to GE Vernova, which builds nuclear reactors that generate electricity.
In this context, they're assuming that GE Vernova stock is a buy.
Image source: Getty Images.
What Oracle said last night
Oracle "missed" on its fiscal Q1 earnings, reporting $1.47 per share in profit when analysts' consensus expectation was for $1.48 per share. That's fine, though. What investors are paying the most attention to is CEO Safra Catz's prediction that "Oracle Cloud Infrastructure revenue [will] grow 77% to $18 billion this fiscal year -- and then increase to $32 billion, $73 billion, $114 billion, and $144 billion over the subsequent four years."
Catz is promising 14x AI revenue growth over five years. Investors are taking this prediction at face value and assuming that what's good for Oracle will be good for GE Vernova, too.
Is GE Vernova stock a buy?
This is why investors are buying GE Vernova stock Tuesday morning -- but here's the thing:
Oracle's CEO is promising 14x growth over five years, but analysts polled by S&P Global Market Intelligence think GE Vernova will grow earnings by only 5x (to $41.28 per share) by 2030.
On the one hand, that works out to a 38% annualized earnings growth rate, which is pretty fantastic. On the other hand, GE Vernova stock already trades at more than 140 times earnings. That works out to a PEG ratio of 3.8, folks.
Too rich for my blood. GE Vernova stock is a sell.
