Al Root

GE Vernova had a wild week after new AI fears sent investors into a very brief tizzy.

Recent share price volatility tells investors something important about the stock and what's driving it.

GE Vernova makes utility-scale power generation equipment. It's become the go-to stock for investors looking to capitalize on the growing demand for electricity, driven mainly by power-hungry AI data centers.

U.S. electricity demand grew roughly 1% a year for the past 20 years. Wall Street expects growth to be closer to 3% annually for the coming 20 years.

That theme, along with strong business execution by Vernova, left shares up 100% coming into Monday trading. Shares doubled despite a 10.5% drop this past Wednesday, catalyzed by fears that startup Mythic might succeed in making AI chips that require less power. Shares recovered, however, and GE Vernova stock ended last week with a loss of just 2.3%.

All those stock moves leave GE Vernova valued at about 33 times earnings before interest, taxes, depreciation, and amortization, or Ebitda, expected over the coming 12 months.

The average industrial company in the S&P 500 trades for closer to 17 times.

GE Vernova gets the big valuation because Ebitda is expected to grow significantly. The company is expected to generate Ebitda of $3.4 billion in 2025, rising to about $11 billion by 2028. Jefferies analyst Julien Dumoulin-Smith expects it will grow to more than $18 billion by 2035.

That's Ebitda growth of almost 20% a year for a decade. Making adjustments for cash generation and assuming stable valuation multiples, Dumoulin-Smith's numbers imply double-digit gains for GE Vernova stock for a decade.

That's great. That's the risk, too. It's tough to value things on 2035 numbers. A lot could happen between now and then. There isn't much for investors to do other than be aware of the problem. GE Vernova stock simply implies a lot of growth for many years.

Dumoulin-Smith, for his part, remains bullish. He rates shares Buy and has a $830 price target for the stock.

Overall, 72% of analysts covering shares rate them Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for GE Vernova stock is about $753.

GE Vernova shares were up 1.3% at $666.72 in early trading on Monday, while the S&P 500 and Dow Jones Industrial Average were up 0.5% and 0.3%, respectively.

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December 22, 2025 11:32 ET (16:32 GMT)

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