GE Vernova Inc. (NYSE:GEV) is trying to recover after an 8.5% decline, with Bernstein defending the stock as “wired to win” and highlighting that data centers account for only 38% of its electrification order book. This supports the argument that the company’s utility exposure extends beyond AI power demand alone. That diversification is a real consideration, but it does not directly address the concern raised by GLJ Research. The firm’s Sell rating is not based on doubts about AI-driven power demand. Instead, GLJ Research argues that GE Vernova is still a fundamentally cyclical gas-turbine manufacturer, while its current valuation reflects an assumption that the ongoing boom can remain permanent.
Bernstein Defends GE Vernova’s Diversification Beyond Data Centers
GE Vernova shares stabilized after an 8.5% decline triggered by GLJ Research’s new Sell rating and broader concerns that a slowdown in AI spending could weigh on the company’s order book. Bernstein analyst Sunaina Ocalan directly challenged the view that GE Vernova’s outlook depends mainly on AI infrastructure spending:
While data center orders were $5 billion in H1 2026, or about 38% of electrification orders, the remaining 62% was utility-driven. Utility spend should continue to grow, supported by grid reliability and resilience investments. A slowdown in data center demand may alleviate generation bottlenecks but would do little to address existing grid constraints.
Bernstein continues to rate the stock a Buy with a $1,298 price target, while nearly 80% of analysts covering GE Vernova also have a Buy rating. In a separate development, the company announced a wind turbine supply agreement with Eurus Energy Holdings in Japan.
A Bear Case Built on Valuation, Not Demand
GLJ Research’s Gordon Johnson argued that GE Vernova’s turbines being sold out does not justify the stock trading at roughly 38.9x forward EV/EBITDA at the time the report was released. Johnson described the company as “a cyclical gas turbine manufacturer priced as a secular compounder,” highlighting the premium valuation placed on a fundamentally cyclical business. His model estimates 2027 EBITDA at $7.42 billion, which is 22% below Wall Street consensus. The lower forecast is partly based on the timing of turbine orders, as equipment scheduled for 2027 delivery was ordered in 2024, before the company introduced its more recent price increase.
According to our database, hedge fund ownership of GE Vernova fell from 118 funds at the end of the first quarter of 2026 to 106 funds at the end of the second quarter of 2026. The decline points to a meaningful reduction in institutional interest. However, short interest remained modest at 3.29% of float as of August 31, 2026. These indicators show that institutional caution around GE Vernova is growing, although there is not yet a broad consensus against the stock.
GE Vernova’s exposure to the broader utility market is genuine and helps reduce its reliance on data center demand. But the key concern raised by GLJ Research goes beyond the demand outlook. The firm’s Sell thesis centers on whether a historically cyclical manufacturer can justify trading at a secular growth multiple. Bernstein’s defense of the stock does not directly address that valuation concern.
READ NEXT: Zscaler’s AI Story Is Accelerating, Its Growth Guide Isn’t, and Google’s Traffic Numbers Look Fine, Its Search Economics Tell Another Story
