GE Vernova (GEV) Morgan Stanley's 14th Annual Laguna Conference summary

Market outlook and demand trends

• Backlog reached $176 billion at Q2, targeting $200 billion by early 2027, with strong order momentum and premium pricing for 2030–2032 deliveries.

• Durable demand for power products, especially gas turbines, with 40 GW of new contract commitments in H1 and expectations for continued growth, though at a moderated pace in H2.

• Electrification backlog grew from $6 billion in 2021 to $45 billion, driven by innovation and new product development, especially for data centers.

• Data center orders in electrification more than doubled in H1 2026 compared to 2025, though order flow is expected to be lumpy in H2.

• Onshore wind remains soft due to market uncertainties, but profitability is improving, with repowering seen as a key opportunity.

Operational execution and capacity expansion

• Installed over 350 new machines in gas factories in 18 months, achieving a 5 GW quarterly run rate, with plans to step up to 6 GW and then 7 GW per quarter by 2028.

• Automation, robotics, and lean operations are driving sequential improvements in output without major new construction.

• Aeroderivative and heavy-duty gas turbines are positioned for both front and behind-the-meter applications, with flexibility to meet evolving customer needs.

• Integration of Prolec GE is exceeding expectations, enabling capital-efficient growth and greater flexibility in serving North American customers.

Financial performance and capital allocation

• $13 billion cash balance provides flexibility for organic growth, M&A, and opportunistic share buybacks, with 12.4 million shares repurchased at an average price of $560.

• Capital allocation prioritizes organic growth and R&D, with M&A focused on technology differentiation and accretive financials.

• Power Services revenue projected to grow from $12 billion in 2025 to $22 billion in 2035, with annual growth driven by expanding installed base.

• Margin expansion expected to continue, with 2026 change in margin and backlog anticipated to exceed 2025's low double-digit growth.