GEV's Turbines to Power Saudi Gas Plant: How to Play the Stock

GE Vernova Inc. GEV recently clinched an order to supply five of its advanced 7H-Class gas turbines for Saudi Arabia’s 3 gigawatts (GW) Qurayyah Independent Power Plant Expansion Project. This further strengthens GEV’s Saudi ties, with the company playing a crucial role in stimulating the evolution of the Kingdom’s energy infrastructure for almost 90 years. 

With Saudi Arabia’s goal of generating 50% of its electricity from gas by 2030, this deal highlights GE Vernova’s technological edge in energy transition and potential for recurring revenues from such infrastructure projects. This, in turn, might encourage investors focused on clean energy stocks to add GEV stock to their portfolios. 

However, before making any hasty decision, let’s delve deep into the company’s performance at the bourses in recent times, growth prospects as well as risks (if any) to investing in the same. This way, an investor can make an informed decision.

GEV Stock Outperforms Industry, Sector & S&P 500

Shares of GE Vernova have surged an impressive 47.5% in the year-to-date period, outperforming the Zacks Alternative-Energy industry’s growth of 16.7% and the broader Zacks Oils-Energy sector’s decline of 4.4%. It has also outpaced the S&P 500’s rise of 0.1% over the same period.

A similar stellar performance has been delivered by other industry players, such as Constellation Energy Corp. CEG and Talen Energy Corp. TLN, whose shares have surged 40.3% and 23.4%, respectively, year-to-date.

What’s Pushing GEV Stock Up?

As industries worldwide transition toward a more sustainable energy future, GE Vernova plays a vital role by providing cutting-edge technologies that significantly reduce greenhouse gas emissions. To this end, the company’s recent developments, indicating its continued efforts to expand its footprint in the clean energy industry, may have boosted investor confidence, which was duly reflected in its year-to-date share price hike.

Impressively, GE Vernova entered 2025 with a $20 million investment plan, supported by Singapore’s EDB, to develop next-generation repair technologies for its HA gas turbines at its Global Repair Service Center. In February, it completed upgrades at key Iraqi power plants using its turbines, adding more than 500 MW to the national grid ahead of summer. 

In April, its wind segment signed a 20th supply agreement with Germany’s BBWind to provide turbines for 18 MW of community wind projects. Most recently, the company secured a major contract with Oglethorpe Power in the United States to supply two high-efficiency gas turbines, hydrogen-cooled generators, steam turbines, and associated tech for a new natural gas facility. These milestones underscore GE Vernova’s expanding global presence and strategic push across gas, wind, and service-driven power solutions in 2025.

Will GEV Stock Continue With its Winning Streak?

Driven by rising global demand for reliable, lower-emission energy, GE Vernova is seeing strong order growth in its gas power business. In the first quarter of 2025, gas turbine orders rose 11.8% year over year, while heavy gas turbine orders surged 81.3%. This order growth is expected to bolster GEV’s revenues in the days ahead. 

The company is also benefiting from growing demand for its low-emission equipment, backed by increasing usage of electricity across the globe. Notably, equipment revenues climbed 16% year over year in the first quarter, reflecting robust momentum. 

With global electricity consumption projected to grow 3.9% in 2025 and around 4% annually through 2027 (per the International Energy Agency), GE Vernova is well-positioned for continued top-line growth, supporting its long-term operational strength. 

In line with this, the Zacks Consensus Estimate for GEV’s long-term (three-to-five years) earnings growth rate is pegged at a solid 18%. 

In fact, the growing electricity demand worldwide from renewable sources has also been bolstering the long-term growth prospects of other clean energy stocks like TLN and CEG. Notably, the long-term earnings growth rate for TLN is 7.1%, while that for CEG is 12.4%.  

Now, let’s take a quick look at GEV’s near-term estimates to see if they also have a similar growth story.

Estimates for GEV

The Zacks Consensus Estimate for 2025 and 2026 sales implies an improvement of 6.4% and 10%, respectively, year over year. A similar improvement can be witnessed in the company’s 2025 and 2026 earnings estimates. 

Moreover, the Zacks Consensus Estimate for GEV’s near-term earnings estimate shows solid improvement over the past 60 days. The upward revision in earnings estimates indicates analysts’ increasing confidence in the stock’s earnings-generating capabilities.

Risks to Consider Before Choosing GEV

Despite strong growth prospects, GE Vernova faces challenges that investors should note. The offshore wind industry continues to struggle with rising material costs and persistent supply chain issues, leading to multiple project cancellations. As a wind turbine manufacturer, GEV is under pressure from increased product and project costs, along with delays in execution timelines. These disruptions could affect the timing of cash collections and reduce contract profitability. If such adverse developments persist or worsen, they may lead to financial losses beyond current projections, posing a potential risk to the company’s overall performance and investor returns in the near term.

GEV Stock Trading at a Premium

In terms of valuation, GEV’s forward 12-month price-to-earnings (P/E) is 52.88X, a premium to its peer group’s average of 15.93X. This suggests that investors will be paying a higher price than the company's expected earnings growth compared to its peers.

Final Thoughts

To conclude, investors interested in GEV Vernova should wait for a better entry point, considering its premium valuation. 

However, those who have already invested in this Zacks Rank #3 (Hold) company may continue to do so, as its upbeat sales estimates, solid share price returns over the past year and upward revision in near-term earnings estimates offer solid growth prospects.  

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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