GE Vernova shares were being punished on Wednesday for an earnings miss. While we understand that a miss is a miss, in this case, we think that sellers are focusing on the wrong metric for judging the results. Revenue in the second quarter ended June 30 increased about 22% year over year to $11.1 billion, topping expectations of $10.7 billion, according to LSEG. Earnings per share (EPS) increased 33% to $2.47 but came up short versus the LSEG-compiled consensus estimate of $3.01 apiece. Why we own it GE Vernova has several powerful secular tailwinds at its back, including the need for more reliable power and electrification, especially as AI drives up demand for energy-intensive data centers. Competitors : Siemens Energy , MHI Most recent buy : Nov. 6, 2025 Initiated : May 13, 2025 Bottom line Using the EPS miss as a reason to knock the Club stock down 8% is short-sighted. The more important line item to watch is order growth, which jumped 88% organically (or 95% on a reported basis) to $24.2 billion in Q2, driven by strong equipment demand in the company’s Power and Electrification segments. After all, GE Vernova’s natural gas turbines are crucial to running power-hungry artificial intelligence data centers. Analysts focus on orders to gauge demand rather than simply revenue, which may reflect past order fulfillment. GE Vernova’s backlog of $176 billion was also way up, thanks to a sequential acceleration in total order growth, which drove the second quarter’s total book-to-bill to over 2. That means more than twice as many orders came in as orders filled. That tracks given management saying on the post-earnings call that gas power is “mostly sold out through 2030,” with an expectation that more than half of the 2031 production slots will be sold by the end of this year. CEO Scott Strazik said the company is on track to achieve a $200 billion backlog in 2027. The company is not sitting still, however, indicating a ramp-up in capacity in the years to come to convert the backlog more quickly. As a result, the company raised its full-year revenue outlook, which is generally another good set-up for long-term investors willing to look past a three-month earnings miss. Remember, the best buying opportunities usually occur when a stock goes down on a near-term hiccup in an otherwise strong long-term story. That’s what we’re seeing with GE Vernova’s numbers. Not to mention, GE Vernova was a cash machine in Q2, with free cash flow soaring more than 2,500% year over year to $5.12 billion. That was way above the $1.2 billion estimate. Management credits higher down payments on increased orders and slot reservations in its Power segment. The company also significantly boosted its full-year free cash flow numbers. GEV YTD mountain GE Vernova YTD While reiterating our buy-equivalent 1 rating on the stock and our $1,300-per-share price target, we would not be surprised to see near-term upside capped due to investors taking profits in a stock still up…
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