MW Trump may not like wind power, but Stargate AI plan is a boon for GE Vernova

By Tomi Kilgore

Stock rallies toward a sixth straight record close as total orders rise to a record, despite weakness in wind business

Shares of GE Vernova Inc. climbed further into record territory on Wednesday amid optimism over how the power and renewable-energy company will benefit from President Donald Trump's massive initiative to build out America's artificial-intelligence infrastructure, known as Stargate.

That optimism offset both Trump's disdain for wind power, which represents roughly 30% of GE Vernova's revenue, and the company's fourth-quarter report, in which profit and revenue missed expectations.

The stock $(GEV.AU)$ surged 3% in midday trading, putting it on track for a sixth straight record close. It has charged 16.8% higher over the past six sessions and powered 35.7% higher since the Nov. 5 presidential election.

In response to a question on the post-earnings call with analysts about how the Trump administration's stance on AI and wind might affect the company's outlook, management said that "the diversity of demand just continues to get stronger," including in its pipeline, gas and electric-grid businesses.

Also read: Oracle, Nvidia and other Big Tech stocks jump as Trump rolls out Stargate AI initiative.

Market demand for gas generation has already increased significantly, partially driven by data-center hyperscaler demand associated with AI, said Chief Executive Scott Strazik, according to an AlphaSense transcript.

"We're having more active customer discussions on nuclear, about the existing installed base of 65 plants here in the U.S. that are running our technology today," he added.

Regarding the wind business, management said they're projecting financials to be flat through the next few years. "We're cautious," they said, while noting they've been cautious "for a while."

For the quarter to Dec. 31, the company reported that total orders for its business segments increased 20.5% from a year ago to a record $13.37 billion, as a 118.2% surge in electrification and 20.2% jump in power orders offset a 41.2% drop in wind orders.

The company said the decline in wind orders was mostly the result of a tough year-over-year comparison, as a large U.S. onshore wind order was booked in the fourth quarter of 2023.

The results come a day after Trump ordered a pause in the leasing and permitting of wind projects.

Total revenue grew 5.1% to a record $10.56 billion, but that missed the FactSet consensus of $10.7 billion.

Among the business segments, wind revenue rose 20.2% to $3.11 billion, to beat the FactSet consensus of $3.02 billion. Despite the tumble in wind orders, the segment was the only one that beat revenue expectations.

Power revenue fell 2.9% to $5.43 billion, below the FactSet consensus of $5.63 billion, and electrification revenue rose 11% to $2.18 billion but missed expectations for $2.21 billion.

Meanwhile, net income increased to $484 million, or $1.73 a share, from $197 million, or 72 cents a share.

The FactSet consensus for earnings per share was $2.30.

Free cash flow fell to $572 million from $1.65 billion, just shy of expectations of $580.4 million.

But despite the revenue and profit miss, the company kept its 2025 guidance intact. The company still expects full-year revenue of $36 billion to $37 billion, compared with 2024 revenue of $34.94 billion, as growth in power and electrification offsets a decline in wind.

The outlook for free cash flow of $2 billion to $2.5 billion was also affirmed.

"We had a strong finish to 2024 as we execute our strategy to deliver disciplined revenue growth with increased profitability and positive cash generation," said Chief Financial Officer Ken Parks.

The fourth-quarter report was the company's fourth since it spun off from the former General Electric Co., now known as GE Aerospace $(GE)$, in April 2024.

GE Vernova's stock has soared 55% over the past three months, while the S&P 500 SPX has tacked on 4.2%.

-Tomi Kilgore

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January 22, 2025 12:10 ET (17:10 GMT)

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