Jim Cramer warned on August 24 that mounting political and community backlash against data center power consumption could directly impact equipment suppliers like GE Vernova Inc. (NYSE:GEV). He noted:
What happens if the hyperscalers get their act together and offer a code of conduct instead of being out there all by themselves cutting deals that are now regretted? Stranger things have happened than a code of conduct. It must happen if this issue is going to be tempered… I can’t believe they haven’t figured that out. That’s why you have to look at certain companies that were thriving because of data centers, companies like the biggest turbine company that turns natural gas into power. That’s GE Vernova. Now, we own it for the Charitable Trust and I now feel that the market won’t pay up for its order book because maybe it’s gotten soft. I don’t want to get rid of it but I don’t want to take a beating either.
AI Power Demand and Record Backlog
GE Vernova Inc. (NYSE:GEV) is fundamentally reshaping the grid for the AI era, and its second-quarter 2026 results validate that dominance. Revenue climbed 22% year-over-year to $11.1 billion, but the real story was the order book. Total Q2 orders surged 88% organically to a record $24.2 billion, as data centers scramble for heavy-duty and aeroderivative gas turbines. The runaway demand pushed the company’s total backlog to a staggering $176 billion. Management is highly confident in this trajectory, aggressively raising full-year free cash flow guidance to a massive range of $11.5 billion to $12.5 billion and cementing GE Vernova Inc. (NYSE:GEV) as a solid cash-generating AI infrastructure play.
Grid Bottlenecks and Margin Pressures
Despite the top-line explosion, GE Vernova Inc.’s (NYSE:GEV) Q2 diluted EPS of $2.47 missed consensus estimates, while margin pressure persisted in parts of its business, particularly Wind, where organic orders fell 40%. More importantly, as Cramer admitted about his own stake in the Charitable Trust, he now feels the market might refuse to pay up for the company’s massive order book if it starts to soften. With local governments imposing stricter regulations and higher compensation requirements on data centers, the pace of hyperscaler expansion is facing real bottlenecks. If developers are delayed by political pushback and grid limitations, the company’s delivery timelines and following revenue recognition could stretch further out, which could test investor patience.
Where the Smart Money Stands
According to Insider Monkey’s database tracking over 1,000 elite hedge funds, institutional sentiment toward GE Vernova Inc. (NYSE:GEV) cooled slightly in the second quarter of 2026. A total of 106 hedge funds held positions in the company at the end of Q2, down from 118 funds in the prior quarter. Meanwhile, short interest remains subdued, with the short percentage of float standing at 3.20%. It is worth noting that, as per Insider Monkey, Fisher Asset Management showed a highly bullish sentiment toward the stock as it increased its position in Q2 by a staggering 90,037% to nearly 3.56 million shares.
GE Vernova Inc. (NYSE:GEV) remains a significant cornerstone of the global energy transition. While near-term margin headwinds, wind segment softness, and order book valuation debates introduce legitimate points of caution, massive free cash flow generation and a $176 billion backlog provide a strong structural backbone. For investors weighing near-term volatility against multi-year power demand, Cramer’s remarks show the delicate balance between record headline numbers and shifting market sentiment.
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