Revenue Growth & Margin Expansion Aid GEV's Q2: More Upside Ahead?

In the Power segment, orders surged 134% organically and revenues of $5.5 billion increased 14%, led by Gas Power equipment. In Electrification, revenues surged 66% organically to $6.3 billion, driving a book-to-bill ratio of approximately 1.7, with continued strong demand for grid equipment. Revenues of $3.6 billion increased significantly, driven by Power Transmission and Grid Systems Integration.

The company expects the Power and Electrification units to continue performing well and has raised its 2026 guidance. GE Vernova now expects revenues in the band of $45.5-$46.5 billion, up from $44.5-$45.5 billion. Free cash flow is now expected in the band of $11.5-$12.5 billion, up from $6.5-$7.5 billion. In the Power segment, 18-20% organic revenue growth is now anticipated, up from 16-18%. 

Revenues in the Electrification unit are now expected in the band of $14.5-$15 billion, inclusive of approximately $3.1 billion from Prolec GE, up from $14-$14.5 billion, inclusive of approximately $3 billion from Prolec GE. Driven by demand growth in Electrification, data center orders have reached more than $5 billion year to date, more than double the 2025 number.

GE Vernova's Power and Electrification equipment businesses are expected to be major growth drivers in the coming years, supported by rising global electricity demand, grid modernization and the accelerating adoption of artificial intelligence. Companies like GEV are investing heavily in new gas-fired generation to ensure reliable baseload power while integrating renewable energy, creating sustained demand for its advanced gas turbines and related services.

Moreover, rapid data center expansion and increasing electrification of transportation and industry are placing unprecedented pressure on aging power grids, driving robust demand for the company's Electrification segment. GE Vernova is well positioned to capitalize on this trend through its portfolio of grid equipment, including high-voltage switchgear, transformers, substations, power conversion systems and grid automation solutions.

The combination of a multi-year equipment backlog, strong service opportunities from its expanding installed base and favorable long-term investment trends in power infrastructure should support sustained revenue growth, margin expansion and earnings momentum over the next several years.

Taking a Look at the Backlog Growth of GEV’s Peers

Eaton’s ETN backlog continues to expand rapidly, supported by strong demand for electrical equipment used in data centers, utilities, commercial facilities and industrial applications. At the end of the first quarter of 2026, the company’s total Electrical-sector backlog was 48% higher than a year earlier. Backlog in Electrical Americas increased 44%, while Electrical Global recorded a sharper 73% rise.

The backlog expansion should provide Eaton with substantial revenue visibility as investments in electrification, grid modernization and artificial-intelligence infrastructure accelerate. Data-center construction is creating demand for switchgear, power-distribution systems, backup-power equipment and thermal-management solutions, while utilities are upgrading networks to accommodate higher electricity consumption and renewable generation.

Eaton is investing in additional production capacity to address this demand, which should support sales growth and manufacturing utilization. However, the eventual benefit to earnings will depend on the company’s ability to expand capacity, manage supply constraints and deliver projects without eroding margins.

Vertiv’s VRT backlog has risen sharply as hyperscale and colocation customers increase spending on power and cooling infrastructure for artificial-intelligence data centers. At the end of 2025, the company’s backlog reached $15 billion, representing an increase of 109% from the prior-year period.

Vertiv’s record backlog gives it strong visibility into future sales as data-center operators deploy increasingly power-intensive computing systems. Higher rack densities require advanced electrical distribution, uninterruptible power supplies, liquid cooling and prefabricated infrastructure, all of which play directly to Vertiv’s product portfolio. Vertiv is consequently expanding manufacturing capacity and increasing technology investments to accelerate deliveries and capture additional market share. While the backlog provides a solid foundation for growth, successful conversion will depend on execution, component availability and the timing of large data-center projects, which can cause quarterly order and revenue patterns to fluctuate.

GEV's Price Performance, Valuation and Estimates

Shares of GE Vernova have surged in double digits (% wise) so far this year, easily surpassing the Zacks Alternate Energy – Other industry’s growth.

YTD Price Comparison

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GE Vernova trades at a forward 12-month price-to-sales (P/S) ratio of 5.4, above the industry’s 5.21.

GEV's Shares Look a Tad Pricey

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See how the Zacks Consensus Estimate for GEV’s earnings has been revised over the past 30 days.

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GEV’s Zacks Rank

GEV currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

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