Key Takeaways:
GE Vernova ended Q2 2026 with a $176 billion backlog, up $13 billion sequentially, as orders jumped 88 percent organically to $24.2 billion.
GE Vernova said gas equipment backlog and slot reservation agreements increased from 100 GW to 116 GW, with management expecting at least 125 GW by year-end. Data-center orders exceeded $5 billion year to date, the company reported.
Revenue reached $11.1 billion in Q2, up 22 percent year over year, while adjusted EBITDA rose 62 percent to $1.25 billion. Adjusted EBITDA margin expanded to 11.3 percent from 8.5 percent a year earlier. Free cash flow hit $5.1 billion compared with $194 million in Q2 2025.
The backlog gives GE Vernova multi-year revenue visibility as electricity consumption, grid investment and data-center demand create sustained demand across its portfolio. The stock trades at 39.79 times forward earnings versus the industry average of 25.39 times.
Total orders climbed 89 percent year over year in the first half of 2026, with Power orders up 99 percent and Electrification orders up 131 percent. That follows 34 percent organic order growth in 2025, up from 7 percent in 2024. Free cash flow guidance has been raised three times in 2026, from $4.5 billion to $5 billion at the December outlook to $11.5 billion to $12.5 billion today.
The wind segment remains the weak link. Wind orders fell 11 percent globally in the first half of 2026 even as Power and Electrification surged. The company continues to win smaller wind contracts, including a recent order for 43 onshore turbines for the 163.4 MW Fatehgarh Wind Farm in Rajasthan, India.
Shares have cooled after a strong run. The stock dropped 15.7 percent in July and slipped about 5 percent over the past month, following the Q2 earnings report on July 22 when adjusted EBITDA and EPS missed Street estimates. The stock trades near 33 times estimated 2026 earnings, with an enterprise value of $255 billion, roughly 40 times this year's adjusted EBITDA.
The Zacks Consensus Estimate for 2026 EPS implies an increase of 74.11 percent, while the 2027 estimate implies a decline of 21.2 percent year over year.
The broader industry is experiencing a similar investment cycle. U.S. utilities are increasing capital spending as data centers, industrial activity and electrification drive electricity demand. Southern Company and Entergy Corporation are expected to gain from rising demand in their service territories.
The backlog expansion shows management expects AI-driven electricity demand to keep accelerating. Investors will watch the Q3 earnings call for updated slot reservation agreements and wind segment restructuring progress.
This article is for informational purposes only and does not constitute investment advice.
