A power equipment giant priced like a software stock? GE Vernova (GEV.US) hit by GLJ short attack, Bernstein fires back: it's not just data centersutilities are the real trump card.

Title context: A power equipment giant priced like a software stock? GE Vernova (GEV.US) hit by GLJ short attack, Bernstein fires back: it's not just data centersutilities are the real trump card. Text: After Monday's sharp selloff, GE Vernova (GEV.US) stabilized on Tuesday, yet the debate surrounding this power equipment giant is only intensifying: on one side, GLJ Research issued a "sell" rating and the lowest price target on Wall Street at $470; on the other, Bernstein reiterated its "buy" rating and insisted the company remains "wired to win." GE Vernova closed down 8.6% on Monday, leading declines in the U.S. power infrastructure sector and extending its month-long downtrend. Even after Monday's rout, the stock is still up about one-third year-to-date, but it has fallen 16% over the past month. On Tuesday, the stock closed up 0.9%, temporarily halting the slide. Short Attack: A Cyclical Stock Priced Like a Software Stock The direct trigger for the selloff was GLJ Research's downgrade of the stock to "sell" with a $470 price target, the lowest on Wall Street. GLJ analyst Gordon Johnson wrote bluntly in his report that GE Vernova is "a cyclical gas turbine manufacturer priced as a long-term compounder." He believes there is a fundamental mismatch in how the market is pricing the company. Johnson pointed out that GE Vernova "is a cyclical industrial company valued against software companies." He noted the stock trades at a forward EV/EBITDA multiple of 38.9x, nearly four times the valuation of Micron Technology, Inc. (MU.US), whose earnings also depend on industry supply-demand dynamics beyond its control. "Gas turbines have been through two full boom-bust cycles in the lifetime of most people covering this stock. The market has decided this time is different. We think the market is making that call too early," Johnson wrote. He also warned from an order cycle perspective: GE Vernova's order-to-delivery cycle has stretched to 4 to 5 years, with high-premium orders not materializing until 2029, and cyclical risks concentrated in 2030. Johnson asserted that all orders placed in 2026 and 2027 will be delivered in 2030 to 2031, at which point its supply model shows industry effective capacity of 104 to 113 gigawatts against order volumes of only 88 to 90 gigawatts. This supply-demand gap means the long-term growth narrative currently embraced by the market could face the test of overcapacity and a cyclical reversal. Additionally, investors worry that a pullback in AI spending sentiment could expose GE Vernova to order cancellation risk. Previously, power demand from AI data centers was seen as a key growth engine for the company, but if tech giants slow capital expenditure, whether related orders can be fulfilled becomes a market focus. Bulls Fight Back: It's Not Just Data CentersUtilities Are the Ballast Facing GLJ's bearish stance, Bernstein analyst Sunaina Ocalan came out in support on Tuesday. She reiterated her "buy" rating on GE Vernova with a $1,298 price target, saying the company remains "wired to win." She emphasized that GE Vernova's narrative "is not all data centers." Ocalan provided key data in her report: in the first half of 2026, GE Vernova's data center orders totaled $5 billion, accounting for about 38% of electrification orders; the remaining 62% was driven by utilities. She believes utility spending should continue to grow, supported by investments in grid reliability and resilience. "A slowdown in data center demand might ease generation bottlenecks, but it would do little to address existing grid constraints," Ocalan wrote. In other words, even if AI data center construction cools, the upgrading and strengthening of aging power grids will still provide long-term demand support. Looking at overall Wall Street sentiment, Bernstein is not alone. FactSet data shows that nearly 80% of analysts covering GE Vernova rate it a "buy." Jefferies also expressed optimism on the stock in a research note last Friday, noting that as power demand grows and GE Vernova's installed base of power equipment expands, its parts and services revenue will rise accordingly. Orders Keep Coming: Japan Wind Agreement Signed Amid the fierce battle in capital markets, GE Vernova appears to be responding to market doubts with orders. The company announced Tuesday that it signed an agreement with Eurus Energy Holdings to supply seven 4.2-megawatt, 117-meter rotor turbines for the 29.4-megawatt Eurus Hiyamizutouge wind farm in Aomori Prefecture, Japan. The agreement includes a two-year service contract with a two-year extension option. The company said its 4-megawatt platform is specifically designed for Japanese wind conditions, and the related turbines have accumulated over 2 million operating hours. The project supports Japan's goal of sourcing 36% to 38% of its electricity from renewable sources by 2030. GE Vernova secured 339 megawatts of orders in Japan in 2025, with its technology accounting for about 25% of Japan's onshore wind installed capacity and about 50% of Japan's heavy-duty gas turbine installed capacity. The company has over 59,000 wind turbines operating globally and adopts a standardized "workhorse" strategy emphasizing repeatable execution and long-term reliability. Additionally, GE Vernova and SPIC Brasil completed the modernization of the third generating unit at the 1,710-megawatt So Simo hydroelectric plant, taking 10.3 months, below the 12-month regulatory limit; the consortium led by the company is responsible for a broader modernization program with investments exceeding 1.2 billion reais, targeting completion of all six units by 2029.