This Energy Stock Could Have Momentum in 2026 Beyond the AI Power Trade

Core Viewpoint - GE Vernova is well-positioned to benefit from the increasing global demand for electricity and renewable energy, driven by the technology sector's expansion of AI data centers and overall growth in the power industry [1][3]. Group 1: Electricity Demand and Data Centers - Global electricity demand is projected to rise by 4.3% in 2024, accelerating from a 2.5% increase in 2023 [1]. - Data centers accounted for approximately 1.5% of the world's total electricity consumption in 2024, with their electricity demand growing at a 12% annualized rate from 2020 to 2024 [2]. - GE Vernova reported a significant increase in orders for data centers, with over $2 billion in orders for 2025, more than tripling the previous year's total [6]. Group 2: Financial Performance - GE Vernova's revenue increased by 9% to $38.1 billion in 2025, with $19.8 billion coming from the power segment, driven by strong demand for natural gas power equipment [8]. - The company reported fourth-quarter earnings of $13.39 per share, exceeding analysts' expectations by over $10 per share, partly due to growing sales to data centers [5]. Group 3: Natural Gas and Renewable Energy Growth - Global natural gas demand rose by 2.7% in 2024, reaching an all-time high, with further growth expected at 1% in 2025 and 2% in 2026, particularly in emerging markets [9]. - GE Vernova's wind segment generated $9.1 billion in revenue in 2025, with a 9% increase in orders, as global renewable energy capacity is expected to more than double by 2030 [10]. Group 4: Future Outlook - The company has a total backlog of $150 billion in projects, indicating a strong future regardless of fluctuations in the AI sector [11]. - Deloitte research suggests that AI data centers' power demand in the U.S. could increase by over 3,000% by 2035, highlighting a significant growth opportunity for GE Vernova [7].