GE Vernova (GEV) is the power equipment business that General Electric spun off on April 2, 2024, ending 132 years of corporate lineage that traces back to Thomas Edison’s Edison General Electric Company. The company is headquartered in Cambridge, Massachusetts, runs 600 sites across 97 countries, and has around 75,000 employees. For the year ended December 31, 2025, GEV generated $38.1 billion in revenue and $3.2 billion in Adjusted EBITDA, an 8.4% margin. The balance sheet holds $10.2 billion of cash against $2.6 billion of long-term debt after the February 2026 bond issuance that funded the Prolec GE acquisition. The interesting part is the backlog. At the end of Q1 2026, Remaining Performance Obligations reached $163.3 billion, up 32% year over year. The three operating segments are performing very differently. Power and Electrification are throwing off cash. Wind is still losing money.
The question this post addresses is what has to go right for management’s 2028 financial targets to be met, and what the equity would be worth if they are.
From Edison to Spin-Off
The spin-off that created GE Vernova was the final chapter in a decade-long dismantling of General Electric. Under Jeff Immelt (CEO 2001 through 2017) and then John Flannery (2017 through 2018), GE’s stock collapsed from around $40 in 2016 to under $7 in 2018. GE Capital wound down. GE Healthcare was spun off as an independent public company (GEHC) in January 2023. What remained at the parent were three businesses: Aviation (jet engines), Power (gas, nuclear, steam, hydro), and Renewable Energy (onshore and offshore wind, grid solutions).
CEO Larry Culp announced in November 2021 that GE would separate into three independent public companies. Healthcare was first. Aviation, which kept the jet engine business, would retain the GE name and ticker and become GE Aerospace. The power and renewable businesses were combined into GE Vernova Inc., spun off on April 2, 2024, with its own NYSE listing under the ticker GEV.
GE announced the “Vernova” name in July 2022, after six months of consultation with customers, employees, and investors. The name is a combination of “ver,” derived from “verde” and “verdant” to signal the greens and blues of the Earth, and “nova,” from the Latin “novus,” or “new,” reflecting a new and innovative era of lower carbon energy. “Novus” also happens to be one of the roots of the word “innovation,” a pillar of GE from its founding. The “GE” prefix was retained deliberately. The alternative, “GE Energy,” had been used before for a prior energy subsidiary and carried a legacy GE wanted to move past, including a bet on natural gas that underestimated the speed of the clean energy transition. Keeping “GE” in front of a new word let the company signal continuity with GE’s 130-year engineering heritage while distancing itself from that specific chapter.
The setup was not flattering. In FY2023, the businesses that became GEV had generated $33.2 billion in revenue and $807 million in Adjusted EBITDA. That is a 2.4% margin on a business with more than 100 years of engineering heritage. Wind had lost roughly $1 billion. Offshore wind contracts signed at fixed prices before 2022 were deeply underwater as steel, labor, and logistics costs had surged. Grid Solutions was a sub-scale collection of businesses assembled from Alstom’s power equipment unit in 2015 at a price GE had never been able to justify.
Two years later, the financials look different.
Three Segments, Three Stories
Power
Power is the oldest and largest segment. For FY2025, Power generated $19.8 billion in revenue and $2.9 billion in Adjusted EBITDA, a 14.7% margin. In Q1 2026, the segment delivered $5.0 billion in revenue and $811 million in EBITDA at a 16.3% margin, up from 11.6% in Q1 2025. The trajectory is clear. Power’s EBITDA margin was 9.9% in FY2023. It has expanded by around 640 basis points in two and a quarter years.
What Power sells:
- Gas Power. Heavy-duty gas turbines for utility-scale generation, aeroderivative turbines for smaller applications, and long-term service agreements (LTSAs) for the 7,000-unit installed base. The H-class HA-Turbine is the flagship product. In 2025, the segment booked orders for 173 gas turbines, 55% more than in 2024, including 43 HA-Turbines. Gas Power services RPO of around $70 billion represents the majority of GEV’s total services book.
- Nuclear Power. Services for the installed base of boiling water reactors and development of the BWRX-300 small modular reactor (SMR) through the GE Hitachi Nuclear Energy joint venture. The first commercial SMR contract in North America was signed with Ontario Power Generation for four units at the Darlington site. GEV also signed a memorandum of understanding (MOU) with the US government for BWRX-300 deployments valued at up to $100 billion. The MOU is not a contract and does not guarantee any revenue. It signals a policy direction.
- Hydro Power. Hydroelectric turbines, generators, and services. A stable, low-growth business.
- Steam Power. Historically one of GE’s largest businesses, now being wound down. GEV sold the nuclear engineering services activities of Steam Power to Électricité de France for around $0.6 billion in May 2024. The coal-related steam business is being run for cash with no new construction orders.
The business that matters here is Gas Power. Margins are expanding because the backlog is now being converted at higher prices than the backlog two years ago. Gas turbine slot reservations and backlog combined reached 83 GW at year-end 2025. For context, a large gas-fired power plant is typically 500 MW to 1,500 MW. Eighty-three gigawatts is the equivalent of over 100 large gas plants worth of future equipment demand.
The demand driver is hyperscaler data center power. Microsoft, Google, Amazon, and Meta have collectively committed to building data center capacity at a scale that requires power delivered quickly and reliably. Nuclear has decades of lead time. Wind and solar are intermittent. The grid is congested in most US regions that matter for data center siting. Natural gas turbines are the only technology that can provide 500-plus MW of firm capacity within a three-year build horizon. GEV is one of three companies in the world that can supply them at scale, alongside Siemens Energy and Mitsubishi Power.
The services component is what makes this business durable. When GEV sells a gas turbine, it typically also sells a long-term service agreement covering up to 25 years of maintenance. The LTSA book at year-end 2025 covered around 1,800 units with about 10 years of average remaining contract life. Once installed, gas turbines are almost never switched away from their original manufacturer for maintenance because the engineering integration is too tight. Services revenue in FY2025 was $12.5 billion at Power, growing on both price and utilization.
Electrification
Electrification is the fastest-growing segment. For FY2025, it generated $9.6 billion in revenue and $1.4 billion in EBITDA at a 14.9% margin. That margin was 9.0% in FY2024 and 3.7% in FY2023. In Q1 2026, Electrification revenue grew 61% year over year to $3.0 billion with a 17.8% EBITDA margin. The reported growth is inflated by the Prolec GE acquisition that closed February 2, 2026. Organic growth excluding Prolec was 29% in Q1.
Electrification sells the equipment that makes the grid work:
- Grid Solutions covers high-voltage direct current (HVDC) transmission systems, AC substations, power transformers, switchgear, and reactive compensation equipment.
- Power Conversion and Storage sells industrial drives, synchronous condensers, and battery storage systems.
- Electrification Software licenses GridOS, a platform for grid orchestration, and related products for asset management and grid analytics.
Order backlog at Electrification grew from $16.3 billion at year-end 2023 to $42.4 billion at the end of Q1 2026, a 160% increase in 27 months. The drivers are aging infrastructure replacement, new renewable capacity needing interconnection, HVDC links being built for long-distance power transfer, and data center campuses needing dedicated substations. Power transformer lead times have stretched from months to two or three years industry-wide. Customers are paying deposits to reserve manufacturing slots years in advance.
Wind
Wind is the segment that has not worked. For FY2025, Wind generated $9.1 billion in revenue and a $598 million EBITDA loss, a negative 6.6% margin. In Q1 2026, it got worse: revenue fell 23% to $1.4 billion and the EBITDA loss widened to $382 million, a negative 26.7% margin. That is the worst quarterly margin in Wind’s history as an independent reporting segment.
What Wind sells:
- Onshore Wind. Wind turbines installed on land, plus services for an installed base of around 59,000 units. Services RPO at year-end 2025 was $12.5 billion.
- Offshore Wind. The Haliade-X offshore turbine, marketed as the world’s most powerful commercial offshore wind turbine. This is where the money has been lost on legacy fixed-price contracts.
- LM Wind Power. Blade manufacturing. GEV has closed and consolidated several blade factories since the spin, reducing fixed cost but also capacity.
Two things made Q1 2026 especially bad. First, the Trump administration issued an executive order in late December 2025 pausing federal approvals for new offshore wind leases. That affected ongoing commissioning work at Vineyard Wind offshore Massachusetts. The pause was lifted in late January 2026, allowing Vineyard Wind turbine installation to proceed, but the disruption came at the worst possible time for revenue recognition on fixed-price contracts. Second, tariffs on imported wind tower components added cost that GEV cannot fully pass through on legacy contracts.
The narrative for Wind going forward depends on two things. Onshore Wind orders have recovered sharply. In Q1 2026, Onshore Wind booked 146 turbine orders, compared with just 23 in Q1 2025. If onshore order economics are improving and offshore losses can be contained, Wind could approach breakeven by 2027. If offshore losses continue or worsen, the $3.3 billion of goodwill sitting on the Wind segment’s balance sheet becomes impairment risk. GEV disclosed that the Wind goodwill test at year-end 2025 showed only a 27% cushion above carrying value. A healthy business would typically show 50% or more.
Why 2024 Turned Out to Be the Right Moment
The three-year gap between the November 2021 decision to spin and the April 2024 completion turned out to matter. What happened in those three years was a structural shift in electricity demand.
From 2000 through 2020, US electricity consumption was essentially flat. Efficiency gains from LED lighting, better motors, and data center power density improvements offset growth in population and economic activity. Utility CapEx programs were built around replacement rather than expansion. Power equipment demand globally was mature.
Starting in 2022, three things changed:
- AI data centers. OpenAI released ChatGPT in November 2022. Within 18 months, hyperscalers had committed to capital plans that implied power demand growth well outside historical patterns. PJM, the largest US grid operator, raised its load forecast by over 30% in a single year. Data-center-specific power demand became the single biggest driver of new generation capacity in North America.
- Grid infrastructure aging. Much of the US transmission and distribution grid was built between 1960 and 1980. Transformers and switchgear designed for 40-year lives are being replaced at the same time that new equipment is needed for new generation.
- Renewable interconnection backlog. Wind and solar projects with queue positions at US grid operators have grown to over 2,500 GW of proposed capacity. Every interconnection requires substations, HVDC links, and grid-side equipment. GEV sells most of those components.
None of this was visible when Larry Culp announced the spin in November 2021. GE Vernova was designed to exist as a smaller, more focused business that could execute operationally. It turned out to exist at the moment when its three product categories all became scarce.
The financial evidence is in the RPO trajectory:
| Period End | Total RPO ($B) | YoY Growth |
|---|---|---|
| Dec 31, 2023 | 115.6 | — |
| Dec 31, 2024 | 119.0 | 3% |
| Dec 31, 2025 | 150.2 | 26% |
| Mar 31, 2026 | 163.3 | 32% |
Two Years of Consistent Improvement, One Persistent Exception
The improvement since the spin has been consistent and fast.
| ($B, except margin) | FY2023 | FY2024 | FY2025 | Q1 2026 Ann. |
|---|---|---|---|---|
| Revenue | 33.2 | 34.9 | 38.1 | ~37 |
| Adj EBITDA | 0.8 | 2.0 | 3.2 | ~3.6 |
| Adj EBITDA Margin | 2.4% | 5.8% | 8.4% | 9.6% |
| Free Cash Flow | n/a | 1.7 | 3.7 | — |
Note that Q1 2026 is seasonally the weakest quarter for Wind, so the annualized EBITDA figure understates the likely full-year result.
By segment, the divergence is stark:
| Segment | FY2025 Revenue | FY2025 EBITDA Margin | Q1 2026 EBITDA Margin |
|---|---|---|---|
| Power | $19.8B | 14.7% | 16.3% |
| Electrification | $9.6B | 14.9% | 17.8% |
| Wind | $9.1B | (6.6%) | (26.7%) |
Power and Electrification are both running above 16% margins and accelerating. Wind lost $382 million in a single quarter on $1.4 billion of revenue. That is the story in a table.
Two items in 2025 and Q1 2026 net income are worth flagging as non-recurring. FY2025 includes a $2.9 billion non-cash release of a deferred tax valuation allowance. Q1 2026 includes a $4.0 billion non-cash gain from remeasuring GEV’s previously held equity interest in Prolec GE at the acquisition close, plus a $330 million gain on the sale of the Proficy software business. Strip those out and normalized net income is a fraction of the reported figures.
The balance sheet is clean. At March 31, 2026, GEV holds $10.2 billion in cash against $2.6 billion in long-term debt, a net cash position of $7.6 billion. The debt was issued in February 2026 to fund Prolec GE, with maturities spread across 2031, 2036, and 2056.
Cash generation is real but has an important nuance. GEV generated $3.7 billion in free cash flow in FY2025 and $4.8 billion in Q1 2026 alone, but a substantial portion comes from customer advance payments. As gas turbine and transformer lead times have stretched to two and three years, customers pay deposits to reserve manufacturing slots. This creates a structural working capital benefit as long as orders keep growing. In a steady state where orders equal revenue, normalized free cash flow would be closer to 70-80% of EBITDA rather than the 100%-plus conversion seen recently.
Management has run the capital return program aggressively. $4.6 billion has been spent on buybacks through Q1 2026, against a $10 billion authorization. The dividend was doubled to $2 per share annually in December 2025.
Buying the Transformer Factory While Transformers Are Scarce
In October 2025, GEV announced it would acquire the remaining 50% of Prolec GE, its joint venture with Grupo Xignux (a Mexican industrial holding company), for cash and assumed debt totaling around $5.3 billion. The transaction closed February 2, 2026.
Prolec GE has around 10,000 employees and operates seven manufacturing plants, five of them in the United States. It manufactures power transformers across the full range from small distribution units to the largest generator step-up transformers used at power plants. Transformers are a choke point in the global grid buildout. Lead times have stretched to two or three years industry-wide. New greenfield transformer capacity takes four years or more to build from ground-breaking to first commercial unit.
The logic for the acquisition is straightforward. GEV’s Electrification segment had been selling transformers as part of integrated substation and HVDC solutions, but it was dependent on Prolec and other third parties for physical supply. Buying the rest of Prolec gives GEV control over the manufacturing capacity.
Two caveats are worth noting. First, the headline price of $5.3 billion was paid for the 50% GEV did not already own. The implied enterprise value for 100% of Prolec is closer to $10-11 billion. That is a rich multiple for a transformer manufacturer, reflecting the scarcity of transformer capacity in the current market.
Second, GEV booked a $4.0 billion pre-tax gain at closing from the remeasurement of its previously held 50% interest. This gain is non-cash and is specifically the kind of accounting item that can make a net income number misleading. The underlying operating performance of Prolec GE drives value, not the one-time gain at close.
GEV has committed an additional $1.0 billion in CapEx and R&D at Prolec through 2028, on top of Prolec’s own ongoing spending. The stated goal is to expand US manufacturing capacity to reduce dependence on imports and tariff exposure.
Who Is Running This and What to Make of Zingoni’s Departure
Scott Strazik has been CEO since the spin-off. He is 47, joined GE in 1999, and ran GE Gas Power from 2018 through 2021, a period when that business had absorbed the troubled Alstom acquisition and was struggling with pricing and execution. By 2021 he had returned Gas Power to profitability. He was then given the combined Power, Renewable Energy, and Digital businesses that became GEV. His track record is the primary reason to believe the 2028 margin targets are achievable rather than aspirational.
The three segment CEOs are Eric Gray at Power (since January 2026, replacing Mavi Zingoni who resigned despite Power having its best margin quarter on record), Philippe Piron at Electrification, and Vic Abate at Wind. Zingoni’s departure is worth flagging. A segment CEO leaving immediately after her best results in three years is the kind of thing that rarely has a benign explanation. GEV has not said more than “mutual decision,” and Eric Gray has not yet had a full quarter to demonstrate whether Power’s margin trajectory continues under new leadership.
The largest institutional holders are Fidelity and Vanguard at 8.7% each, and BlackRock at 6.5%. Executive officers and directors as a group hold less than 1% of shares, which means the people running this business have limited skin in the game relative to its size. Strazik’s stock ownership is a function of equity grants, not personal purchases.
Valuation
The central question is whether management’s 2028 targets are achievable, and if so, what the equity is worth today.
By 2028, management expects $56 billion in revenue at a 20% Adjusted EBITDA margin, implying roughly $11.2 billion in EBITDA. For context, FY2025 EBITDA was $3.2 billion. Getting to $11.2 billion in three years requires Power and Electrification margins to keep expanding and Wind to stop losing money at scale. Wind is the swing factor in every scenario.
Rather than present a 2028 target price and ask you to trust a three-year forecast, the table below shows what the equity is worth today under each scenario, discounting a 2028 value back at 9% over 2.75 years.
| Scenario | 2028 EBITDA | Multiple | 2028 Equity Value | Per Share Today |
|---|---|---|---|---|
| Bear | $7.0B | 14x | $98B | ~$300 |
| Base | $9.2B | 16x | $145B | ~$443 |
| Bull | $11.2B | 18x | $199B | ~$615 |
Assumptions: - Bear: Wind stays deeply negative. Power and Electrification grow but margins plateau near current levels. Revenue falls short of target by $6 billion. Multiple reflects mature industrial rather than growth compounder. - Base: Wind reaches breakeven by 2028. Power reaches 18%, Electrification 17%. Revenue hits $54 billion. Multiple reflects high-quality industrial with durable services backlog. - Bull: Management’s targets achieved in full. 20% blended margin on $56 billion. Multiple reflects scarcity of FCF growth at this scale, with SMR optionality as additional long-dated value not in the model.
A DCF cross-check using base case 2028 FCF of roughly $6.5 billion, 3% terminal growth, and 9% WACC produces a present equity value of around $440 per share, consistent with the base case above.
The $163 billion RPO is the most important input to any of these scenarios. It represents contracted future revenue, not aspirations. Even the bear case assumes GEV delivers on most of what is already in backlog. The real bear case is not “backlog evaporates” but “backlog converts at low margins because Wind losses offset Power and Electrification profits.”
What Would Break the Thesis
Two things can break the thesis. The first is Wind. If offshore losses continue at the Q1 2026 pace for another two years, Wind will consume a significant share of the EBITDA that Power and Electrification are generating. The 27% goodwill cushion in Wind at year-end 2025 is narrow enough that sustained losses could trigger an impairment charge on top of the operating loss.
The second is backlog conversion. A $163 billion RPO is only valuable if it converts at the margins assumed. Gas turbine slot reservations can be deferred. Transformer contracts can be repriced. Tariff cost pass-through on legacy contracts is partial. If pricing discipline erodes under customer pressure, the margin trajectory that drives every scenario in this analysis softens with it.
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What to Watch
| Catalyst | Why It Matters | Timeline |
|---|---|---|
| Q2 2026 earnings | First full quarter with Prolec GE consolidated. Watch Electrification organic margin and Wind trajectory. | Late July 2026 (estimated) |
| Wind segment FY2026 guidance update | Whether Q1 2026 loss was seasonal or structural. | Q2 2026 earnings call |
| BWRX-300 US government conversion | Any movement from MOU toward definitive contracts could materially change SMR revenue outlook. | 2026-2027 (estimated) |
| Vineyard Wind commissioning completion | Revenue recognition and any loss true-ups on the project’s fixed-price contracts. | Mid to late 2026 (estimated) |
| Capital Markets Day / 2028 target update | Whether management raises, maintains, or lowers the $56B / 20% margin targets. | Late 2026 (estimated) |
| Prolec GE first full-year contribution | Revenue, margin, and synergy realization from the acquisition. | FY2026 results, reported January 2027 |
| Wind goodwill annual impairment test | 27% cushion at year-end 2025 was narrow. Any further offshore deterioration could trigger impairment. | Q4 2026 |
| Gas turbine order book | Whether slot reservations beyond 2028 continue to grow at current pace. | Each quarterly report |
| Tariff developments | Trade policy changes would affect both cost and customer demand. | Ongoing |
| Buyback pace | $5.4B remaining on $10B program. Management’s willingness to accelerate buybacks is a signal. | Each quarterly report |
| CEO transition at Power | Eric Gray’s first full year. Whether Power margins continue to expand is partly a test of operational continuity. | Through FY2026 |
Sources:
- GE Vernova 10-K filed January 29, 2026
- GE Vernova Q1 2026 10-Q filed April 22, 2026
- Q1 2026 earnings 8-K filed April 22, 2026
- Definitive Proxy Statement (DEF 14A) filed April 3, 2026
- GE Unveils Brand Names for Three Planned Future Public Companies
- 100 Percent Inspiration: GE Vernova’s World-Changing Legacy of Innovation
- Catchword Branding | Name review of GE Vernova
Research and analysis conducted with AI assistance using SEC EDGAR filings as primary sources.