GE Vernova lifts 2026 outlook as AI boom fuels power equipment demand

By Pooja Menon

April 22 (Reuters) - GE Vernova GEV.N on Wednesday raised its annual forecasts for revenue and adjusted core profit margin, betting on surging demand from data centers and grid infrastructure, sending its shares up over 13% to an all-time high in early trading.

A sharp rise in electricity demand, particularly from power-hungry data centers tied to artificial intelligence, is boosting orders for gas turbines and grid equipment, strengthening the company's core businesses even as its wind unit struggles.

It expects revenue of $44.5 billion to $45.5 billion in 2026, compared with $44 billion to $45 billion earlier, and adjusted EBITDA margin of 12% to 14%, up from 11% to 13% earlier.

Analysts on average expect revenue of $44.5 billion and margin of 13.7%, according to data compiled by LSEG.

STRONG QUARTERLY GROWTH

CEO Scott Strazik said the company expects to reach at least 110 gigawatts (GW) of combined gas turbine backlog and slot reservation agreements by year-end.

The company added $13 billion to its backlog, taking the total to $163 billion. It now expects the backlog to reach $200 billion by 2027, a year earlier than its previous forecast.

The power unit's core profit rose 57% to $811 million in the first quarter, while the electrification unit's profit more than doubled to $528 million.

GE Vernova also expects higher gas power revenue in the second half of the year as it ships more turbines and ramps up capacity to nearly 20 GW.

WIND WEIGHS, COSTS RISE

The wind segment remained a drag, with revenue down 23% in the first quarter due to fewer onshore turbine deliveries. Losses widened to about $382 million.

In the second quarter, it expects wind revenue to fall at a mid-teens rate and core losses of $200 million to $300 million.

GE Vernova said it has installed remaining wind turbines at the Vineyard Wind project in Massachusetts. In January, a U.S. judge had lifted the Trump administration's temporary halt on its construction.

It expects global tariffs to cost $250 million to $350 million in 2026.