Key Points
- GE Vernova is doubling its dividend and increasing its stock buyback program amid strong demand.
- Massive electricity demand from AI, data centers, and electrification is fueling the company’s growth.
- Its stock has soared about 86% since spinning off from General Electric in early 2024.
- The company significantly raised its long-term profit forecasts and expects its order backlog to hit $200 billion.
Riding a wave of soaring electricity demand, U.S. manufacturer GE Vernova is rewarding its shareholders significantly, signaling strong confidence in the future of natural gas-fired power.
At its investor day on Tuesday, the power-generation equipment maker announced it would double its dividend and increase its stock buyback program. The company also raised its long-term earnings projections, cementing its status as one of the year’s top-performing stocks.
GE Vernova’s success is directly tied to the explosive growth of data centers, artificial intelligence, and the overall electrification of the economy, all of which require massive amounts of reliable power. Since spinning off from General Electric early this year, the company’s shares have skyrocketed by about 86%.
“AI is a real driver for us right now, but it isn’t the only driver,” CEO Scott Strazik said in an interview. “We’re going to generate a lot of cash, and that’s going to give us a chance to play offense.”
The company backed up his confidence with hard numbers. It increased its quarterly dividend to 50 cents per share and expanded its share repurchase plan to $10 billion. Looking ahead, GE Vernova expects its total order backlog to grow from $135 billion to approximately $200 billion by the end of 2028.
Strazik also pushed back against fears of a potential AI bubble, stating that he doesn’t believe the tech or power sectors are overheated. He noted that sales to major tech companies are growing rapidly and expects the trend to accelerate into next year.
