
Core Viewpoint - UBS initiated coverage on GE Vernova with a "Buy" rating and a target price of $614, leading to a nearly 3% increase in the stock price to $530.28, driven by unprecedented demand for power due to AI data centers and supply constraints [1] Company Overview - GE Vernova, a spin-off from General Electric, focuses on power systems, wind turbine manufacturing, and electrification solutions, aiming to balance reliability, affordability, and sustainability in energy [2] Market Dynamics - The expansion of AI data centers is expected to significantly increase electricity demand in the U.S., with projections indicating a potential rise in summer peak load by 70 GW by 2035, surpassing historical peaks [5][6] - The demand for electricity from AI data centers is anticipated to continue growing explosively, with the International Energy Agency predicting that global data center electricity demand will more than double by 2030 [6] Financial Projections - UBS analyst Amit Mehrotra forecasts a remarkable 70% compound annual growth rate in GE Vernova's earnings over the next five years, the highest among global listed companies covered by UBS [4] - GE Vernova's current earnings expansion opportunity is estimated to be only 25% utilized, with expectations of tripling operating profits by 2030 [4] Competitive Position - GE Vernova's order backlog is over three times its annual revenue, with long-term service business now accounting for approximately 45% of sales, indicating strong future revenue potential [4] - The company is expected to benefit from stricter pricing discipline and improved order profitability, alongside a lean cost structure [4]