Why has GE Vernova $GEV dropped 12% since May?

Worked at GE's competitor for quite a few years.

1. Gas turbines were marketed as a "bridge technology" until renewables and nuclear would have picked up, creating a moderate but steady demand. Globally there is only a handful of companies that can make decent gas turbines and only 3 (3.5 if you count Ansaldo) that have combined cycle technology. The technology is the moat.
2. Data centers broke this notion because they need relatively clean power fast. Gas can provide this. The demand for turbines skyrocketed. Prices increased.
3. The whole industry underwent massive cost cutting which should be done by now.
4. The stock price increase is the reflection of 3. and 4.
5. The wind energy has low margins and low technological edge. There is no moat in wind and no room for one company to make it big.
6. Batteries are evolving fast but batteries provide power optimisation, they cannot generate electricity unless charged. I also do not see moat in batteries.

My view is that GE Vernova stock will trail the AI wave. Once the momentum is gone, it will go back to the status quo before the AI (cyclical, little growth). The only possible game changer could be small-scale nuclear power.

Its a good company but not a great stock. Growth is slow and they have 3% operating margins. PE right now is around 37 and GEV is the rare business who's 1 year forward PE is higher than its trailing PE. To me it seems like very so so business overall with the only advantage being they don't have a lot of competition. However there are quite a few companies I own (or want to own) that have much better margins and also don't have a lot of competition.

GE is riding data center supply and outlook sentiment because that’s what they talk most about and what most people see when they think of their gas turbine or wind turbine business, but don’t forget they produce a healthy offering of critical grid infrastructure components. Namely long-lead medium and high voltage components that if you don’t secure well in advance you’re unable to energize half billion dollar projects or make much needed transmission upgrades. I’m long GE, along with a few other names in domestic and global suppliers.

Some hyperscalers are getting cold feet

DC developer Crusoe mentioned today that a major Wyoming project is being paused

After such a monstrous run up, the slightest bit of bad news is going to cause significant sell offs

Right now bottlenecks are everywhere:

• Gas turbines, and turbine blades
• Memory
• CPU
• EUV
• Permitting and local resistance
• Electricians
• Plumbers

If this is interesting, gas has low upfront capex globally, is comparatively cheap in the US but is also volatile at the same time. For a reference, check out the historic Henry Hub gas prices and compare it with the expected lifespan of a gas turbine, which is 25 years.

Power plant owners will always keep this source of headache in mind when planning capacity expansion and will try to hedge and pass on the opex volatility onto the consumer (e.g. utility ot DC operator). Periods with high gas prices stifle overall demand but also boost demand for highly efficient combined cycle technology.

This is more of an added insight and not really a contribution to the GE Vernova stock discussion.

Don't sell, we need more power than ever. Data centers need to do a better job of explaining how they won't disrupt their neighbors wrt noise, water, power draw, employment, etc.

Windmills, without subsidies, aren't their best line of business in the USA, but perhaps the UK & EU, etc. still want/need them.

Have you ever been in heavy traffic and realized your lane is the slowest, so you switch lanes, and then magically your new lane becomes the slowest and the vehicles in your old lane start passing you by? Hopefully that's not the case of you. Now if you only had bought Intel, maybe you'd have done even better, at least in the short term.

Don't forget how short term capital gains are taxed as ordinary income versus long term capital gains.

Check out Jack Bogle's (Vanguard founder) philosophy on investing in the stock market. He's deceased now but plenty of YouTube videos still available.

Data center operator (offtaker) will sign a power purchase agreement (PPA) with a utility company, guaranteeing an electricity supply contract for 25 years. The price of the PPA will be negotiated according to a complex formula - to keep it simple it will be a volatile rate with caps and floors.

The utility company is responsible to secure a gas supply agreement and negotiate the terms with the gas supplier. This agreement is negotiated and the pipeline is built before the construction of the power plant. The agreement with the offtaker serves as a "collateral".

The pipeline is built according to the contracted volume and it is connected either to the national gas supply network or directly to a liquified gas import terminal. Natural gas supply can be a constraint if the country imports natural gas (e.g. Japan, Korea). However, keep in mind that threatening international energy supply is a serious matter that can lead to military interventions.

basically you sold low and bought high.

if you believe that’s it’s not the case and fundamentally micron is going up and gev is going down, then at least followed logic and didn’t panic sell

Cramer is huge on GVE, sooo....

Wow you entered late on this trade