Data Center & AI Power Boom: A Tailwind for GE Vernova's Gas Turbines?

Artificial intelligence (AI) is poised to reshape the energy landscape over the next decade, fueling a dramatic rise in electricity demand, particularly from data centers worldwide. A major April 2025 report from the International Energy Agency (“IEA”) has highlighted this trend, projecting significant growth in power needs to support AI infrastructure. Since natural gas generates roughly a quarter of the world’s electricity, this surge in demand could present a major opportunity for GE Vernova Inc.’s (GEV) Gas Power business, potentially accelerating sales of its gas turbines.

Notably, GE Vernova’s turbines serve as primary power sources, backup systems, or hybrid solutions, helping data centers meet high availability and cost-efficiency targets. In particular, GEV’s aeroderivative turbines, like the LM2500XPRESS, offer quick installation and scalable output, adapting easily to growing power needs. They also take up less space and produce fewer emissions and noise than traditional engines. On the other hand, for larger-scale operations, GE Vernova’s heavy-duty gas turbines deliver reliable, high-output performance with strong lifecycle economics, making them ideal for sustained, large-capacity needs.

A notable example of these gas turbines’ growing demand is GE Vernova’s July 2025 order to supply 29 LM2500XPRESS units to Crusoe AI data centers, underscoring the critical role these turbines play in powering AI-driven facilities.

Such orders should further bolster the company’s gas turbine sales, which improved a solid 213.3% and 11.8% in the second and first quarters of 2025, respectively. As AI continues to drive electricity demand, GE Vernova appears well-positioned to capitalize on this growth, further strengthening its market presence in the gas power sector.

Other Stocks Warranting a Look

GEV apart, stocks like Siemens Energy (SMNEY) and Chevron (CVX) are also expanding their footprint amid growing power demand backed by data center growth, through significant collaborations as mentioned below.

Siemens Energy’s portfolio includes a range of cutting-edge technologies, including gas turbines that are capable of providing an uninterrupted power supply for the efficient operation of data centers. In June 2025, the company joined forces with Eaton to enable the simultaneous construction of data centers and associated on-site power generation with grid connection. The associated power plants will be deployed with Siemens Energy’s highly efficient SGT-800 gas turbines.

Chevron, in April 2025, entered into a partnership with GE Vernova to focus on delivering 4 gigawatts of power by 2027. Per the terms of this deal, GE Vernova will provide seven 7HA gas turbines, while Chevron will help ensure a stable and abundant natural gas supply. Earlier in January, CVX joined forces with Engine No. 1 and GEV to develop scalable, reliable power solutions for U.S.-based data centers running on natural gas.

The Zacks Rundown for GEV

Shares of GE Vernova have surged a solid 239.7% in the past year, outperforming the industry’s 61.2% gain.

From a valuation standpoint, GEV is currently trading at a forward 12-month price-to-earnings (P/E) of 55.15X, representing a premium compared to the industry average of 20.81X.

The Zacks Consensus Estimate for GEV’s near-term bottom-line estimate has moved north over the past 60 days.

GEV currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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This article originally published on Zacks Investment Research (zacks.com).

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