Adding fuel to Wall Street's bullish narrative: GE Vernova (GEV.US) order backlog may surpass $200 billion early next year, CEO says demand is "strong and durable"

On Wednesday, power equipment giant GE Vernova (GEV.US) shares rebounded sharply, driven by comments from CEO Scott Strazik at the Morgan Stanley Laguna Conference: the company's order backlog is expected to surpass $200 billion by early 2027, earlier than Wall Street had previously anticipated. For investors recently rattled by the AI trade pullback, the timing of these remarks was just right. Strazik said GE Vernova's order backlog had already reached $176 billion at the end of the second quarter. Based on expected strong orders in the third quarter, the company is on track to hit $200 billion "very early in 2027." "If you start with the end markets, I would tell you that we continue to see very strong and durable demand," Strazik said. He also called the target a "very humble milestone," citing the broader trend of rising electricity consumption. "The world needs far more energy, and more and more of that energy will come from electricity, and GE Vernova is very well positioned to serve that," he added. What energized the bulls even more was that Strazik didn't want to talk only about AI data centers. He set his sights on 2030 to 2040, saying that could be a "better decade" than 2020 to 2030. Part of the backlog growth is being driven by a continued increase in high-margin service revenue; the company is also boosting capacity through factory automation and Siasun Robot & Automation technology. The financial disclosure schedule also gave the market a timeline: Strazik said that at its January earnings call, GE Vernova will provide its 2027 financial outlook, along with 2026 equipment margin and order backlog data; at its next capital markets day, it will set its 2030 financial outlook and spend considerable time explaining why the company is confident about 2030 to 2040. This narrative almost echoes the thesis of bullish analysts such as Bernstein. Bernstein's Sunaina Ocalan on Tuesday reiterated her "Buy" rating on GE Vernova with a $1,298 price target, saying the company remains "wired to win." Her key caveat: the GE Vernova story is "not all data centers." In the first half of 2026, data center orders were $5 billion, accounting for about 38% of electrification orders; the remaining 62% was driven by utilities. Ocalan believes utility spending should continue to grow, supported by investments in grid reliability and resilience. She noted that a slowdown in data center demand could ease generation bottlenecks, but would do little to address existing grid constraints. In other words, a cooling in AI buildout does not mean the upgrading and strengthening of an aging grid will stop. But the bear case is also very sharp. The direct trigger for GE Vernova's selloff on Monday was GLJ Research downgrading the stock to "Sell" with a $470 price target, the lowest on Wall Street. GLJ analyst Gordon Johnson said bluntly in the report that GE Vernova is "a cyclical gas turbine manufacturer priced as a long-term compounder." He argued that there is a fundamental mismatch in how the market is pricing the company. Johnson noted that the stock trades at 38.9 times forward EV/EBITDA, nearly four times the valuation of Micron Technology, Inc. (MU.US), whose earnings also depend on industry supply and demand dynamics beyond its control.