GE Vernova stock was weak in early Tuesday trading. The biggest issue appears to be a sowngrade of a competitor's stock. The size of the Vernova move, however, shows just how nervous investors are about the AI trade.

Shares of the power generation equipment provider were off 9.2% at $1045.85, while the S&P 500 was down 0.4%.

There aren't any Vernova downgrades from Wall Street analysts or updates from the company to blame for the move. Instead, a downgrade of Germany-based Siemens Energy, which competes with Vernova, appears to have caused the problem.

On Monday, Barclays downgraded Siemens Energy shares to Sell from Hold, according to FactSet. Barron's hasn't seen a copy of the report yet. The firm's price target went up to EUR130 from EUR110.

The downgrade sent Siemens Energy shares down 7.7% in overseas trading.

A downgrade with the share price moving up tells investors what's been going on. Despite the dip, Siemens Energy shares are up 31% year to date and 66% over the past 12 months. And GE Vernova stock, despite Tuesday's dip, was up 62% year to date and 100% over the past 12 months.

Gains have left GE Vernova and Siemens Energy trading for about 40 and 28 times earnings expected over the coming 12 months, respectively.

AI is driving the valuations and stock performance. Power-hungry AI computing is driving demand for Siemens and GE Vernova products. Barclays calls the cycle "exceptionally strong" but sees orders eventually peaking, which will sap some investor enthusiasm soon.

Fears of peak AI-related spending have dogged chip makers, power producers, and a host of other companies for months. The big moves on Tuesday show that peak AI fears remain top of investors' minds.

Other AI-related stocks are down as well. Nvidia shares are off 1.2%. Shares of chip manufacturing equipment maker ASML are off 5.5%. Caterpillar stock is down 4.9%. (Cat also has a division that sells power generation equipment.)

Whether the AI spending cycle is slowing is hard to say. Tuesday's trading shows just how important AI trends are to a host of stocks, including GE Vernova.

As for Wall Street, they remain positive on Vernova stock. Overall, 76% of analysts covering the company rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 typically ranges from 55% to 60%. And almost 70% of analysts covering Siemens Energy shares rate them Buy.

(END) Dow Jones Newswires

July 07, 2026 10:45 ET (14:45 GMT)

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