It's hard to imagine GE Vernova (GEV +0.70%) CEO Scott Strazik wasn't tempted to give his former boss, and current GE Aerospace (GE 1.07%) CEO Larry Culp, a call last week. After all, the company he runs, a spinoff of the former General Electric, surpassed GE Aerospace in market capitalization for the first time. It's an incredible event that no one could have predicted a few years ago.

GE Vernova overtakes GE Aerospace

In context, the core businesses that Strazik now manages (gas power turbines) were once at the epicenter of General Electric's problems in 2018, when Culp took over the company. In fact, the mid- to late-2010s were a grim period for the gas turbine industry, when it faced genuine questions about its long-term structural future as renewable energy appeared to be on an inexorable rise. As such, analysts used to price in more value for GE's renewable energy (wind power) business (now part of GE Vernova) than for GE Power (now GE Vernova's core business).

Image source: Getty Images.

That's all changed now. A comparison of gas turbine orders in 2018 and 2025, and for only the first three months of 2026, shows just how things have changed. Of particular note is GE Vernova's largest turbine, the HA turbine, which received more than four times as many orders in 2025 as in 2018, and is increasingly used to power AI data centers.

Data source: General Electric and GE Vernova presentations.

The improvement is even more stark when focusing on HA turbine orders over the last three years. The thirst to secure power for AI data centers is so strong that GE Vernova's order book is booming.

Data source: GE Vernova.

GE Vernova has gone from a business effectively subsidized in the past by other former GE businesses (notably the GE Aviation businesses that are now part of GE Aerospace) to one that surpassed GE Aerospace last week, driven by the power and electrification businesses. Currently, both companies have a market cap of around $290 billion.

Great technology, great management

It's not as if GE Aerospace has underperformed; in fact, its stock is up 97% over the last three years, and it's not just a matter of being in the right place at the right time to catch the AI boom.

There are two considerations. First, the former GE always had some great technology, and since it tended to operate in long-cycle industries with products that can last decades, that's a major plus because it means it could capture industry upswings. That's exactly what happened with GE Aerospace's joint venture, CFM International, whose LEAP engine is the sole engine on the Boeing 737 MAX and one of two on the Airbus A320neo family of aircraft. It's also the case with GE Vernova's HA and other turbines.

In fact, even CFM's older engine, the CFM56, is being converted to power data centers by FTAI Aviation. Meanwhile, even in the dark days of 2018, the HA turbine was winning market share in a weak market.

Second, both companies have benefited from excellent management. While Culp's tenure at General Electric and later at GE Aerospace will go down in corporate legend, Strazik also has an impressive resume. He was responsible for turning around the ailing GE Power services business as head of GE Power (appointed in 2018) and has successfully positioned GE Vernova for the growth it has enjoyed in recent years.

Image source: Getty Images.

In addition, the growing need to update electric grids, connect renewable energy to the grid, and invest in substations has driven strong growth in GE Vernova's electrification business. However, Strazik needed to position the company to take advantage of it, and it was far from clear whether the market would pick up in this manner a few years ago.

Where to next for both companies

Unfortunately, the conflict in Iran is holding back GE Aerospace's growth prospects, especially if a long period of relatively high oil prices leads to aircraft engine retirements. Still, the company handily beat expectations in the first quarter, and a quick resolution to the conflict is likely to send Culp's company's stock higher.

Meanwhile, Strazik just raised GE Vernova's full-year revenue, earnings, and cash flow guidance due to surging orders, and as long as hyperscalers keep ramping AI spending, the outlook is good for GE Vernova. Both companies are in the right place at the right time, but they didn't get to take advantage of it by accident.