A global shortage of gas turbines could have major implications for a planned buildout of power stations in South and Southeast Asia, writes @SStapczynski https://t.co/tgCjJl19TW ...

Core Insights - Investors may overlook growth-oriented, profitable companies generating free cash flow (FCF) due to home country bias, but can benefit from international exposure through the VictoryShares International Free Cash Flow Growth ETF (GRIN) [1] Group 1: ETF Overview - GRIN tracks the Victory International Free Cash Flow Growth Index, targeting high-growth, international large-cap companies with potential for compounding FCF generation over time [2] - The Index uses FCF as a forward-looking measure, filtering companies based on FCF trends, FCF to return on invested capital, and growth prospects [2] Group 2: Importance of FCF - FCF is a key metric for assessing sustainable growth companies, indicating their ability to reinvest, offer dividends, or buy back stock, all contributing to shareholder value [3] - GRIN's indexed approach focuses on international companies exhibiting these characteristics, helping diversify portfolios concentrated in U.S. equities [3] Group 3: Notable Holdings - Rolls-Royce Holdings, a British aerospace and defense company, is a top holding in GRIN with a 3.88% allocation, potentially benefiting from increased military spending in the EU [4] - Siemens Energy, a German company, is experiencing record orders due to power demands from AI applications, crucial for Europe's power grid [5] - Siemens is also a leading wind power company, contrasting with the U.S. political agenda, highlighting missed opportunities for investors with a home country bias [6] - Sea Limited, based in Singapore, has seen a nearly 70% increase in value for the year as of 8/31/2025, capitalizing on e-commerce strength in Southeast Asia [7] Group 4: Diversification Strategies - For global diversification, investors can pair GRIN with other VictoryShares ETFs, such as the value-oriented VictoryShares Free Cash Flow ETF (VFLO), which focuses on high-quality, large-cap U.S. stocks [8] - The VictoryShares Free Cash Flow Growth ETF (GFLW) provides exposure to U.S. companies with high FCF profitability and growth potential [9]

Core Insights - Artificial intelligence (AI) is expected to significantly increase electricity demand, particularly from data centers, creating opportunities for GE Vernova Inc.'s Gas Power business [1][4] - GE Vernova's gas turbines, including the LM2500XPRESS, are well-suited for data centers due to their quick installation, scalability, and lower emissions [2][3] - The company has seen substantial growth in gas turbine sales, with increases of 213.3% in Q2 2025 and 11.8% in Q1 2025, positioning it favorably in the gas power sector [4][9] Company Developments - GE Vernova received a significant order in July 2025 for 29 LM2500XPRESS turbines from Crusoe AI data centers, highlighting the demand for its products [3][9] - The company's stock has performed well, surging 239.7% over the past year, outperforming the industry average of 61.2% [8] Industry Collaborations - Siemens Energy is expanding its offerings with a partnership with Eaton to construct data centers and on-site power generation using SGT-800 gas turbines [5][6] - Chevron has partnered with GE Vernova to deliver 4 gigawatts of power by 2027, which includes the provision of seven 7HA gas turbines [7] Valuation Metrics - GE Vernova is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 55.15X, which is significantly higher than the industry average of 20.81X [10]

Financial Data and Key Metrics Changes - The energy market is experiencing unprecedented demand, with PJM capacity auction prices rising to $329 per megawatt per day, an 11x increase over two years [5][6] - Project Permian's Levelized Cost of Electricity (LCOE) has improved from over $150 per megawatt hour to under $100 per megawatt hour [15][19] Business Line Data and Key Metrics Changes - The integration of gas turbines with the net power cycle is expected to double power output while halving emissions compared to standalone gas turbines [12][14] - The net power cycle converts nearly 80% of the BTU energy from natural gas into electricity, with approximately half of this power used for auxiliary load [8][9] Market Data and Key Metrics Changes - The market is signaling a need for reliable power solutions due to rising intermittency in local grids and long interconnect queues [5][6] - Corporate sustainability goals are increasingly competing with reliability and affordability concerns in the energy market [5] Company Strategy and Development Direction - The company aims to provide a credible pathway to decarbonize while meeting immediate power needs through the integration of gas turbines and the net power cycle [6][14] - Future projects will focus on establishing reliable power generation first, followed by the integration of net power technology to enhance decarbonization [27][31] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the operational progress and the potential for future deployments, emphasizing the importance of securing off-take agreements [18][81] - The company is focused on disciplined execution and cost control as it moves forward with Project Permian and other initiatives [18][19] Other Important Information - The company has made significant progress in value engineering, reducing costs related to pipe quantities and ASU equipment [17][19] - The recent One Big Beautiful Bill Act tax legislation has positively impacted LCOE by allowing full depreciation of qualifying assets in year one and increasing CO2 utilization credits [19][45] Q&A Session Summary Question: Timing and milestones for SN1 or other projects - Management indicated that the ERCOT interconnect for Project Permian is expected to be ready for first power by mid-2028, with the net power plant potentially coming online in 2029 or 2030 [26][27] Question: Behind the meter opportunities with the new integrated approach - The integration of gas turbines allows for co-location opportunities, providing reliable power generation while establishing a pathway for decarbonization [31][32] Question: Trade-offs in performance or plant operation for value engineering savings - Minor equipment reductions were made without sacrificing overall reliability, focusing on optimizing costs through design adjustments [40][41] Question: Impact of 45Q parity on addressable market - The parity for CO2 utilization enhances the economic viability of projects in the Permian, making it a compelling location for first-of-a-kind technology [42][45] Question: Turbine market availability and vendor readiness - The company is exploring flexible generation options with smaller gas turbines, which are expected to be available for deployment by early to mid-2028 [50][52] Question: Changes to the business model with the new design - The integrated product enhances the business model, allowing for flexibility in project development and licensing while maintaining a modular approach [69][70] Question: Cost trajectory to achieve $100 per megawatt - The company aims to achieve a standalone net power unit cost of $1.2 to $1.3 billion, enabling an LCOE below $100 per megawatt hour through future deployments [73][76] Question: Cash burn expectations and committed payments - The company expects to maintain a cash position of around $340 million by the end of the year, focusing on securing off-take agreements to support future financing [80][81] Question: Timeline for securing an off-take agreement - Management aims to secure off-take agreements as soon as possible, with a focus on achieving FID for the gas turbine piece within the next 60 to 120 days [85][86]

Financial Performance - GE Vernova's orders increased by 4% from $11.8 billion in 2Q'24 to $12.4 billion in 2Q'25[11] - The company's backlog grew by $13.2 billion, reaching $128.7 billion in 2Q'25 compared to $115.5 billion in 2Q'24[11] - Revenue increased by 12% from $8.2 billion in 2Q'24 to $9.1 billion in 2Q'25[11] - Adjusted EBITDA increased by $0.2 billion, from $0.5 billion in 2Q'24 to $0.8 billion in 2Q'25[11] - Adjusted EBITDA margin expanded by 80 bps, from 6.4% in 2Q'24 to 8.5% in 2Q'25[11] - Free cash flow decreased by $0.6 billion, from $0.8 billion in 2Q'24 to $0.2 billion in 2Q'25, but year-to-date improved by $1 billion[11] Segment Performance - Power segment orders increased from $5.0 billion to $7.1 billion, and revenue increased by 9%[15] - Electrification segment revenue increased by 20%[26] - Wind segment revenue grew by 9%[21] Guidance - GE Vernova is raising its 2025 revenue guidance to $36 billion - $37 billion[29]

Core Insights - The article discusses the emerging opportunities for energy companies like GE Vernova (GEV) and Siemens Energy (SMNEY) as the world shifts towards renewable energy and faces rising electricity demand driven by data centers [1][2]. Group 1: GE Vernova (GEV) - GEV powers 25% of the world's electricity and operates the largest gas turbine fleet globally, with around 7,000 units deployed [3]. - The company has nearly 57,000 installed wind turbines, totaling over 120 gigawatts (GW) of capacity, and holds the largest onshore wind fleet in the United States [3]. - GEV reported an 11% year-over-year revenue increase in Q1 2025, with orders growing organically by 8% [4]. - As of March 31, 2025, GEV's cash and cash equivalents totaled $8.11 billion, with no current or long-term debt, indicating a strong solvency position [5]. - GEV plans to invest $5 billion in R&D through 2028, with half allocated for industrializing existing products and the other half for long-term innovation [5]. - GEV's offshore wind business faced challenges, with revenues dropping 53.7% year-over-year due to slower production and rising costs [6][7]. Group 2: Siemens Energy (SMNEY) - SMNEY's technology accounts for approximately 17% of global power generation and transmission, and it reduced CO2 emissions from its operations by 55% in 2024 compared to 2019 [8][9]. - The company operates over 7,000 gas turbines globally and has partnered with Air Liquide to produce renewable hydrogen electrolyzers [9]. - SMNEY reported an 18.4% year-over-year revenue increase in Q1 fiscal 2025, with profit before special items more than doubling [9]. - As of December 31, 2024, SMNEY's cash and cash equivalents totaled $8.56 billion, with current debt of $718 million and long-term debt of $3.36 billion [10]. - SMNEY is expanding manufacturing facilities in multiple countries to meet growing electricity demand [11]. - The company has faced challenges in its renewable energy segment, particularly with Siemens Gamesa, due to quality issues and cost overruns [12][13]. Group 3: Comparative Analysis - The Zacks Consensus Estimate for GEV's 2025 sales and EPS implies improvements of 5.7% and 21.9%, respectively [14]. - In contrast, the estimate for SMNEY's fiscal 2025 sales suggests an 8.4% improvement, while earnings are expected to decline by 42.5% [15]. - Over the past three months, GEV's stock has increased by 5.5%, while SMNEY's stock has surged by 37% [17]. - SMNEY is trading at a forward earnings multiple of 43.53X, which is lower than GEV's 45.27X [18]. - GEV has a better Return on Equity (ROE) compared to SMNEY, indicating higher efficiency in generating profits from its equity base [20]. - Both companies are ranked 3 (Hold) by Zacks, indicating a neutral outlook [25].

Chevron Corporation (CVX) , a major player in the global oil and gas sector, is moving forward with its plans to meet the growing energy demands of data centers across the United States. With the global shift toward artificial intelligence (“AI”) and the rapid expansion of Big Tech, data centers are becoming increasingly power-hungry, requiring a reliable and consistent energy supply. CVX’s foray into this sector marks a significant departure from traditional operations, as it seeks to tap into the surging ...