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Is GE Vernova (GEV) Too Dependent on AI-Driven Power Demand?

GE Vernova Inc. (NYSE:GEV) is among the best debt-free stocks to buy now. In a research note cited by The Fly on January 12, Citi adjusted its estimates and price targets for its industrials group coverage as part of its Q4 outlook review. As a result, it raised its price target on GE Vernova from $658 to $708 while maintaining a Neutral rating, implying a 10% upside.

Before Citi, Robert W. Baird analyst Ben Kallo also downgraded the stock to Neutral from Outperform and lowered the price target to $649, down from $816 earlier.

While GE Vernova Inc.’s (NYSE:GEV) stock has rallied during the last year, its outlook has been soured by concerns about power capacity oversupply, and as Kallo mentioned in his note, these concerns are “shifting sentiment” on the company. Some in the market believe that demand for GEV’s turbines and other equipment was mostly driven by AI-led growth, and that the company will be affected if tech companies can’t turn AI into the future success it is currently estimated to be.

However, GE Vernova Inc. (NYSE:GEV) believes that such concerns don’t capture the full picture. At its recent Investor Day event, the company’s Chief Executive Officer, Scott Strazik, addressed these concerns, saying, “AI is a real driver for us right now, but it isn’t the only driver.”

In early December, the company provided a robust outlook, projecting its total order backlog to reach about $200 billion by the end of 2028, up from $135 billion, according to a Bloomberg report. The company also guided for better profit margins in its power and electrification unit, and raised expectations for dividends and buybacks.

Following the update, several analysts reiterated their confidence in the stock, including JPMorgan, which raised its price target substantially from $740 to $1,000 and maintained its Buy rating.

GE Vernova Inc. (NYSE:GEV), a purpose-built global energy company, is a leader in the electric power industry, offering products and services that generate, transmit, convert, and store electricity. The company has three business segments: power, wind, and electrification.

While we acknowledge the risk and potential of GEV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GEV and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT:  12 Best Software Infrastructure Stocks to Buy According to Hedge Funds and Cathie Wood’s Stock Portfolio: Top 10 Stocks to Buy.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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