The artificial intelligence (AI) sector continues to explode, driving massive investments in computing power and data infrastructure. Companies are racing to build advanced models and applications, fueling a market projected to reach trillions in value.
However, this rapid expansion is hitting real-world limits. Their electricity consumption is projected to soar, potentially reaching 6.7% to 12% of the nation’s total power by 2028 — enough to power 24 million homes. It is demand the existing electric grid cannot handle. Microsoft (NASDAQ:MSFT | MSFT Price Prediction) CEO Satya Nadella recently underscored this being AI’s key issue, saying, “compute is not the bottleneck, but energy and data center space is.”
As data centers multiply to handle AI workloads, power supply and grid capacity are emerging as critical constraints, threatening to slow progress unless addressed swiftly. One company is increasingly being turned to help help resolve this energy crisis: GE Vernova (NYSE:GEV).
Resolving the Coming Crunch
Spun off from the old General Electric in 2024 as it broke itself up into three separate units, GE Vernova specializes in energy technologies, including power generation, electrification systems, and grid equipment. The company provides gas turbines, wind energy solutions, and advanced grid components like transformers and switchgear, essential for reliable electricity delivery.
With the recent acquisition of the remaining stake in Prolec GE, GE Vernova is bolstering its transformer production, targeting North American utilities, industrials, and data centers. This positions it as a key player in upgrading aging infrastructure to support rising electricity demands from electrification and digitization.
Hyperscalers are increasingly partnering with GE Vernova to meet their power needs. As data centers consume vast amounts of energy — equivalent to small cities — these companies require robust electrification solutions to ensure stable operations.
In GE Vernova’s third-quarter 2025 earnings call, CEO Scott Strazik said: “Hyperscalers increasingly are turning to us for their electrification needs with $400 million of orders in 3Q alone. So far this year, we’ve booked roughly $900 million in Electrification orders with hyperscalers, compared to $600 million in all of ’24.”
This surge reflects a shift toward integrated power systems, including high-voltage direct current (HVDC) technology and synchronous condensers for grid stability. Orders from hyperscalers have nearly doubled year-over-year, highlighting GE Vernova’s growing footprint in AI-driven infrastructure.
The company’s Electrification segment saw orders double to $5.1 billion in the quarter, with equipment backlog expanding to $26 billion. This growth is driven by demand in regions like North America, Europe, and the Middle East, where data center expansions require enhanced grid capabilities.
Bridging the AI Energy Gap
GE Vernova’s lean manufacturing and capacity expansions, such as doubling output at facilities like Charleroi, enable it to scale production efficiently. The Prolec acquisition adds $3 billion in annual revenue at 25% EBITDA margins, further strengthening its ability to deliver transformers critical for data center connectivity.
As AI companies grapple with power shortages, GE Vernova stands out as a solution provider. Its technologies help optimize energy distribution, integrate renewables, and enhance grid resilience — directly addressing Nadella’s concerns.
Increasingly, hyperscalers are turning to GE Vernova for tailored electrification, closing the gap between AI ambitions and real-world infrastructure limits.
Key Takeaway
In this era of an AI energy crunch, GE Vernova offers strong growth potential. With a $135 billion backlog, 10% organic revenue growth, and margins expanding to 8% to 9%, the stock is undervalued relative to peers. Since I first identified the utility almost one year ago as the best utility stock to buy, GE Vernova’s shares have raced 73% higher. It remains so today.
The Prolec deal adds immediate EBITDA accretion, while hyperscaler orders signal sustained demand. Trading at a forward P/E below industry averages, GE Vernova is poised for upside as AI infrastructure investments accelerate, making it an excellent buy for long-term investors.
Top Gaining Stocks
Top Losing Stocks