AI might have pushed electricity into a bull market, but while Big Tech is busy betting on nuclear power to keep their data centers humming, analysts are looking for a more practical way to cash in on our ever-growing energy cravings. As the world consumes more power, many forms of electricity generation — from natural gas to wind, hydro, and the like — are expected to see booms of their own. And one Wall Street giant is uniquely positioned to meet much of that demand.

Everything boom: In April, conglomerate General Electric completed a year-long breakup of its business — a move aimed at unlocking the value of its most successful verticals. Its energy company, GE VernovaGEV

, has emerged as the shining star. Made up of GE’s legacy electricity services and its still-unprofitable renewables business, Vernova has become a hot commodity on Wall Street.

• Vernova provides hardware and software for the entire electricity industry, exposing it to natural gas, hydro, nuclear, wind, and grid expansion growth.
• The future-focused energy innovator’s strong performance and shift toward profitability have caught attention — with the stock rising 102% since its launch and soaring past a $75B valuation.

Spinning the Gears

Distracted by independent power producers (IPPs), speculative nuclear plays, and energy commodities like uranium, Wall Street has only recently turned its attention to GE Vernova. After generating over $8B in revenue last quarter, investors are waiting to see if the business can become more profitable and efficient. Analysts polled by FactSet expect a consensus annual earnings before interest, taxes, depreciation, and amortization (EBITDA) to reach $5.6B by 2027, with some estimates even more optimistic.

• Deutsche Bank initiated coverage on Monday with a “buy” rating and the most aggressive forecast on Wall Street, predicting $8B in EBITDA by 2027.
• According to Barron’s, industrial stocks typically trade at about 17x EBITDA, which could put GE Vernova on track for a $140B valuation by the end of 2027 — roughly double its current value.

Making wind work: Vernova still has work to do to reach analysts’ lofty goals. In the past year, the company’s EBITDA reached $1.59B. As Vernova transitions from a division to a standalone business, it’s turning up the heat on profitability. Investors are especially eager for Wednesday’s earnings report since its wind division is a significant profit drag. The company’s leaders are optimistic, claiming that their wind segment, which rakes in over a billion dollars in revenue, will soon start turning a profit. If they’re right, the bulls might just be on the right track.