GE Vernova (GEV) CEO Scott Strazik hasn’t been sitting still lately. Over the past year, he’s met with OpenAI chief Sam Altman multiple times to hammer out the infrastructure deals that could define the next chapter of artificial intelligence.
“I met with Sam multiple times over the past few weeks. It is a relationship that continues to evolve,” Strazik told CNBC following the company’s third quarter results.
Strazik further explained:
The conversations were focused squarely on OpenAI’s escalating power needs, both for generation and the electrical equipment to handle it.
This is the new reality for hyperscalers. As AI models grow in size and data centers proliferate, the companies building them need industrial-scale power. And GE Vernova has positioned itself as the supplier of choice.
Power scarcity has become a bottleneck
The hyperscaler boom is driving unprecedented demand for electrical infrastructure. GE Vernova has quietly locked in deals with every major player, including OpenAI, Oracle, Nvidia, Google, and XAI.
The numbers tell the story. Through the first three quarters of 2025, GE Vernova booked $900 million in electrical equipment orders from hyperscalers. That compares to $600 million for the entire year of 2024.
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But the relationship runs deeper than selling transformers and turbines. Strazik framed the company’s work with hyperscalers as “co-creation,” developing integrated solutions from power generation all the way to the server rack.
That’s the kind of strategic positioning that takes years to build but creates massive moats once established.
The stock took a breather despite solid results
GE Vernova spun off from GE in March 2024, and the stock has since returned over 350% to shareholders.
However, GEV stock moved lower following its Q3 quarterly results, even as it beat expectations with a 55% surge in power equipment orders.
The culprit? GE Vernova didn’t raise its 2025 forecast, which disappointed some investors who’ve watched the stock double over the past year.
Onshore wind also remains soft, and Strazik noted that the business could see revenue down 10% to 15% next year if order softness continues, with margins potentially slipping from the high single digits to the mid-single digits.
Still, Wall Street remains bullish on the long-term story, given the average analyst GEV stock price target sits at $786, roughly 22% above current levels.
Related: BofA sees upside in AI‑Power grid stock
GE Vernova is mostly sold out through 2028
Here’s the constraint investors need to understand.
- GE Vernova has essentially sold out of its power generation equipment through 2028, according to Strazik.
- The company is working through capacity challenges while also navigating evolving tariff policy.
- Management pegged tariff-related costs at $300 million to $400 million for this year.
Those are the kinds of growing pains you want to have. Being sold out three years in advance isn’t a bug; it’s validation of market position.
GEV is also putting its balance sheet to work. With $8 billion in cash and no debt, GE Vernova recently announced a major acquisition, acquiring the 50% it didn’t already own in transformer manufacturer Prolec GE.
Transformers are critical for increasing voltage to accelerate the transmission of electricity. The deal gives GE Vernova complete control over a key piece of the supply chain at a time when demand is exploding.
Capital allocation is getting aggressive
Last month, GE Vernova’s Board approved doubling the annual dividend from $1 to $2 per share. That’s a clear signal management sees sustainable cash generation ahead.
The buyback authorization also increased from $6 billion to $10 billion. Year-to-date, the company has already repurchased 8 million shares for roughly $2.2 billion at an average price of $357.
While the forward yield is around 0.30%, GEV stock is positioned to grow its dividend payout at a stellar pace, driven by free cash flow growth.
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Between now and 2028, GE Vernova expects to generate at least $22 billion in cumulative free cash flow. That’s up from $14 billion in the previous outlook, driven by $6 billion more in adjusted EBITDA.
The company is targeting 20% EBITDA margins by 2028, with both Power and Electrification hitting 22% and Wind at 6%.
GEV is focusing on long-term profitability over short-term market share gains. Management is clear that 2028 isn’t the endgame. It’s a milestone in a much longer growth story driven by the electrification of everything from data centers to transportation to buildings.
The setup looks increasingly compelling
Yes, GEV stock has pulled back. Yes, capacity constraints are real. Yes, tariffs add costs.
But strip away the noise, and GE Vernova is building the infrastructure backbone for the AI revolution while generating massive cash flows and returning capital to shareholders.
The hyperscalers need what GE Vernova sells. That demand isn’t going away. If anything, it’s accelerating.
For investors willing to look past near-term volatility, the combination of market position, cash generation, and capital returns creates a pretty attractive package.
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