Company still set to benefit from gas and nuclear policy
Some think wind power still has a future in the US, even if its president thinks it is “the scam of the century.” That would certainly be beneficial for GE Vernova, one of the world’s largest wind turbine manufacturers.
“We believe there’s a role for wind to play in the US energy ecosystem and in the global energy ecosystem,” Steve Strazik, CEO of the company said on Wednesday.
GE Vernova is focused on electrification, power generating systems and equipment. Its stock has soared 85% so far this year, closing Wednesday at 628.97 with a market capitalization of $170 billion.
Once part of the sprawling General Electric conglomerate put together by the famous Jack Welch, GE Vernova is a merger of General Electric’s renewable and power businesses that spun off as a separate publicly traded company in April 2024.
The business builds and services both gas and wind turbines, setting it up to both benefit and be hurt by Trump policies. Attractive for investors is their large order backlog of $128.7 billion going into 2029, mainly in the gas business.
Wind, however, is facing strong political pushback. GE Vernova is one of the world’s largest wind turbine makers. Yet the segment is a loss maker for the business.
In an environment where Trump refers to wind and solar energy as “stupid,” Strazik said current orders for wind turbines are “very soft.”
Revenue for the first half of the year was $17.14 billion, with gross profits of $3.32 billion and a net income attributable to GE Vernova of $768 million.
“It’s a tougher environment to have customers giving a deposit to believe in building a new wind farm in the US,” he admitted.
Asked whether the Trump administration halting work at offshore wind farms and dismantling tax credits is setting back the industry, Strazik stated: “we are playing the long game here.”
The company is taking the lull as an opportunity to invest in automating the wind blade manufacturing process, he said at the New York Times Climate Forward Conference.
Analysts say the wind business is not that important to the company. Austin Wang, senior equity analyst at GLJ Research, pointed out it is more about image.
“They keep it as one of the major segments, because they still really want GE Vernova to be thought of as a renewables company,” he said. In reality, most of the earnings come from its gas turbine business, he pointed out.
Wang would not be surprised if the company was setting up the wind business for sale down the road. The company is carrying out a restructuring plan to “simplify the organizational structure of, reduce operating costs in, and to right-size the Wind business,” according to its quarterly report.
“They’re already running it down to be a low cost business,” Wang said. “We believe they plan to sell it in the next five or so years.”
Their gas and nuclear segments, however, are set to benefit from favorable attention from Trump and the AI boom.
The company started construction on its first small modular nuclear reactor with a 300 megawatt capacity in Canada. They also submitted their first application to build one in the US, aiming to generate power in the early 2030s.
Energy demands in the US are set to explode because of data centers. Strazik sees the new customer base as uniquely committed to sustainability.
“These large blocks of power with different innovative technologies will move faster at scale in this country because of those customers,” he said.
As a company with assets in gas, wind and nuclear, GE Vernova can spread the risk of individual technologies. In Strazik’s eyes though, there is one common challenge that could hold the US back.
“Different folks and different economics will decide what wins and loses,” he said. “If we don’t move faster on the grid, we’re going to have a real challenge.”