GEV +0.80% NVDA -3.98% GOOGM +1.67% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
The dust from last week's rout of AI-related stocks is settling. But the damage is done. Confidence in these companies' foreseeable futures is weakened. Even names outside the heart of artificial intelligence mania have been upended. Take GE Vernova (NYSE: GEV), for instance, which simply makes power-generating equipment used by some AI data center owners. Shares of this industrial outfit are down 25% since their early October high, with much of this setback materializing just this month following concerning quarterly reports from Alphabet and Nvidia.
There may be some degree of misunderstanding regarding GE Vernova's business, however, that needs to be clarified.
Missed AI's "Act 1"? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
You may be aware that GE Vernova manufactures a number of power-related solutions, ranging from transformers to wind turbines to hydropower equipment. But its leading product line right now is natural gas turbines, accounting for most of last quarter's $6.1 billion in revenue from its power division, which was nearly half of its total top line of $12.6 billion. Sales of this arm's wares improved 25% year over year, while orders for future deliveries of power equipment -- still mostly natural gas turbines -- jumped 178% to $21.8 billion.
Yes, artificial intelligence data centers are now using gas turbines as secondary or even primary power sources, and yes, some data center owners and operators are purchasing this equipment from GE Vernova. That's why its stock's been so vulnerable to worries of a sudden slowdown in AI's anticipated growth.
Just don't lose perspective on the matter. As CEO Scott Strazik said of Vernova's power division in last month's third-quarter conference call, "Demand also remains diverse, with approximately 100 customers in 25 different countries, of which approximately 80% are traditional customers and 20% are for data centers."
In other words, GE Vernova isn't nearly as vulnerable to a contraction in artificial intelligence capital spending as the stock's recent sell-off suggests.
There's some nuance to consider. While most of GE Vernova's gas turbine buyers are more traditional institutions like utility companies, many of these buyers are still purchasing this equipment to provide electricity to data centers. As Goldman Sachs notes, data center demand for power alone is set to more than double between last year and the end of 2027.
Artificial intelligence only accounts for a small portion of the nation's and the planet's ever-growing need for electricity, however. Goldman's outlook adds that even at peak consumption, AI data centers will still only require 8.5% of next year's domestic power-production potential. The rest is rooted in longer-established and growing needs, increasingly including charging electric vehicles.
Most investors also know utility companies here and abroad aren't actually in a great position to meet this future demand with their current production capabilities. They need more capacity, and natural gas turbines are a quick, proven, and environmentally friendly option. To this end, S&P Global notes that orders for gas turbines reached a 20-year high of more than gigawatts last year. For perspective on that figure, GE Vernova has signed 52 gigawatts of new gas power agreements through the first three quarters of 2026, and expects to have at least 130 gigawatts under contract by the end of the year.
Connect the dots. This ticker's recent sell-off is a buying opportunity.
Before you buy stock in GE Vernova, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and GE Vernova wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $341,157!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,037,753!*
Now, it's worth noting Stock Advisor's total average return is 834% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of November 11, 2026.
James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, GE Vernova, Goldman Sachs Group, Nvidia, and S&P Global. The Motley Fool has a disclosure policy.
GE Vernova Fell 25% on Data Center Fears. Only About 20% of Its Gas Turbine Customers Are Data Centers. Time to Buy? was originally published by The Motley Fool
