It's no secret that the rapid proliferation of AI data centers has been a boon for GE Vernova (GEV -2.17%). As management highlighted during last month's earnings conference call, the second quarter's $2.7 billion worth of data center power equipment orders brings its year-to-date data center orders up to $5 billion, more than doubling all of last year's data center-related revenue.
Look for similar growth ahead as well. The company's total backlog now stands at $176 billion, up from just $150 billion as of the end of 2025, despite doing over $20 billion worth of business in the meantime. The stock has reflected this growth too. GE Vernova shares are up 57% year to date, and are higher to the tune of 450% for the past two years... when the AI data center industry took a keener interest in meeting its own electricity needs with on-site power plants.
NYSE: GEV
Key Data Points
The question is, does this big move mean there's no upside left to reap?
Tailwinds are blowing
Don't misread the message. It's unlikely GEV shares will be performing as well in the foreseeable future as they have in the recent past. The cat's out of the bag, so to speak -- almost everyone understands just how important natural gas power turbines have become to the artificial intelligence data center industry.
PwC expects AI data center-driven consumption of natural gas to more than quintuple between now and 2035. That expectation is largely what's reflected in this stock's recent run-up to a premium valuation of more than 40 times next year's consensus per-share profit of $24.87.
Image source: Getty Images.
Just don't pass up what's still an above-average prospect simply because most of that stock's biggest and best gains are in the rearview mirror. This company has plenty of upside ahead, even following its recent rally. Its current backlog represents nearly five years' worth of the company's current annualized revenue, and that backlog is sure to grow in the meantime.
For perspective, the International Energy Agency believes AI data centers' consumption of electricity will double from 2024's levels by 2030. The utility industry isn't in a position to meet that need. These technology companies are going to need to supply their own power with equipment like GE Vernova's.
Follow analysts' lead
The tailwinds are undeniably blowing now, and will continue to do so. But does that alone make the stock a buy here and now at its lofty price? Arguably, yes. GEV has a long earnings growth runway ahead to justify its current valuation. Analysts with Morningstar expect this company's profits to reach $51.12 per share in 2030, roughly doubling next year's bottom line projection.
Data source: Morningstar. Chart by author.
This might help: Even with the stock's recent, sizable gains, the analyst community is still very much on board. Most of them still rate GEV stock as a strong buy, with a 12-month consensus price target of $1,247.66 that's more than 20% above this ticker's present price. That's not a bad way to start out a new longer-term position.
