Wolfe Research Downgrades GE Vernova (GEV) Stock

GE Vernova Inc. (NYSE:GEV) is one of the Top Energy and Utility Stocks Wall Street Analysts Are Talking About. On June 13, Wolfe Research downgraded the stock to ‘Peer Perform’ from ‘Outperform,’ without the price target, as reported by The Fly. As per the firm’s analyst, the downgrade was all about valuation after the stock’s rally. As per the brokerage, GE Vernova Inc. (NYSE:GEV)’s path to achieve EBITDA between $12 billion and $15 billion by the decade’s end is now priced into the shares. Since most of the positives are now adequately discounted, there is a more balanced relationship between risk and reward.

GE Vernova Inc. (NYSE: GEV) benefited from the increased demand for power, thanks to the growth of artificial intelligence data centers. In Q1 2025, the company’s orders of $10.2 billion increased 8% organically. This was aided by the services’ growth and equipment growth in Power. Notably, revenue came in at $8.0 billion, which was up 11% (15% organically). GE Vernova Inc. (NYSE: GEV)’s margins were aided by more profitable volume, price, and productivity. FCF saw an improvement of $1.6 billion YoY, thanks to the higher down payments at Power and better management of working capital.

Artisan Partners, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“Notable adds in the quarter included GE Vernova Inc. (NYSE:GEV) and Oracle. GE Vernova is the power, wind and electrification spinoff from the former GE conglomerate. The company benefits from large global market shares across its businesses, high barriers to entry and a substantial installed base that generates multiyear service revenue streams. Now that the company is standing on its own, we believe it is in the early innings of a turnaround story while benefiting from an attractive underlying demand environment. As the world continues to decarbonize, the resulting need for power, wind and electrification equipment is poised to drive attractive growth over the coming years. Our work on AI data center growth and electrification implications strengthened our conviction in GE Vernova in the quarter, particularly its natural gas business, which we believe will need to act as a bridge fuel as technology companies try to balance AI data center growth with decarbonization targets.”

While we acknowledge the potential of GEV to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk.  If you are looking for an AI stock that is more promising than GEV and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.