GE Vernova Drops the Mic: Exploding AI Power Demand, Buybacks, and a 2028 Profit Surge

GE Vernova used its investor day to do exactly what a stock that’s already up 90% this year needed to do: raise the bar again and then step cleanly over it. The company tightened its story around being the backbone supplier for an AI- and electrification-driven power cycle, raised every major long-term financial target, and sweetened capital returns with a doubled dividend and larger buyback. The one weak spot remains wind, but management’s message was clear – power and electrification are now strong enough to carry the investment case even with wind lagging.

At the headline level, GE Vernova reaffirmed its 2025 revenue (still trending toward the high end of $36-37 bln) and EBITDA margin guidance but raised 2025 free cash flow to $3.5–4.0 billion from $3.0–3.5 billion. For 2026, the company guided to $41–42 billion in revenue, adjusted EBITDA margins of 11–13%, and free cash flow of $4.5–5.0 billion – revenue broadly in line with prior Street expectations, but free cash flow meaningfully higher than consensus. Management also expects cumulative free cash flow of at least $22 billion from 2025–2028, up from a prior “at least $14 billion” bogey, even after roughly $10 billion in capex and R&D over that period.

The biggest reset came in the 2028 framework. GE Vernova now expects 2028 revenue of $52 billion with a 20% adjusted EBITDA margin, implying more than $10 billion in EBITDA. The prior 2028 guide called for $45 billion of revenue and 14% margins, so investors got a $7 billion revenue upgrade and a 600-basis-point margin uplift. On free cash flow, the higher backlog quality (more services, better pricing) allows the company to push its cumulative 2025–2028 FCF target up by more than 50%. It also expects its total backlog to grow from $135 billion today to about $200 billion by year-end 2028, with the electrification backlog alone doubling from $30 billion to $60 billion.

Management tied this step-up directly to structural demand from AI data centers, grid upgrades, and broader electrification. CEO Scott Strazik leaned into the theme, arguing that electric power will be “critical to unlocking economic growth in the decades ahead” and that GE Vernova is in the “early chapters of an incredible value creation opportunity” given its installed base and technology in high- and medium-voltage systems. He also pushed back on AI-bubble concerns, noting that AI is “a real driver” but not the only one, and that the fourth quarter is on track to be the company’s biggest ever for selling to hyperscalers, with momentum expected to build further in 2026.

At the segment level, the story is unambiguous : Power and Electrification are the growth engines, Wind is the problem child that management is stabilizing rather than leaning on.

Power is positioned as the primary beneficiary of surging gas-fired generation and data-center demand. For 2025, GE Vernova still expects 6–7% organic revenue growth and 14–15% segment EBITDA margins. By 2026, that ramps to 16–18% organic growth and 16–18% margins, and by 2028 the company is targeting high-teens organic revenue CAGR and 22% segment EBITDA margins, up from a prior 16% margin target. Gas turbine contracts are building the foundation: the company has signed 18 GW of contracts quarter-to-date and expects 80 GW of combined slot reservations and backlog by year-end, providing three to four years of visibility at current build rates and at improved pricing versus the existing backlog.

Electrification – the grid, substations, transmission, and high-voltage equipment that literally connects AI data centers to the power system – is the other pillar. For 2025, management expects organic growth trending toward 25% and segment margins of 14–15%. In 2026, the outlook calls for ~20% organic growth and 17–19% margins. By 2028, the company sees high-teens organic revenue CAGR and 22% segment margins, again up from a prior 16% target. Here, the backlog story is especially important: electrification backlog is projected to double from $30 billion to $60 billion by 2028 as hyperscalers migrate toward higher-voltage architectures and strained grids in key regions force accelerated investment. Strazik and his team cast this as a long-cycle, high-visibility growth driver rather than a short AI fad.

Wind remains the drag, and management didn’t try to hide it. For 2025, wind organic revenue is expected to decline in the high single digits with segment EBITDA losses of roughly $400 million, and 2026 will see “similar losses” to the prior year. Over the longer term, GE Vernova now expects wind organic revenue to decline at a low double-digit CAGR into 2028, with segment margins reaching just 6% – notably lower than the previous 10% margin target. In other words, the improved group-level outlook comes despite wind, not because of it, which reinforces how much of the upgrade is being driven by stronger power and electrification pricing, mix, and execution.

On capital allocation, the investor day message was deliberately shareholder-friendly. The quarterly dividend is being doubled from $0.25 to $0.50 per share starting with the February 2026 payment, and the board increased the share repurchase authorization from $6 billion to $10 billion. GE Vernova has already used $3.3 billion of that authorization as of early December, and management reiterated its framework of returning at least one-third of cash generation to shareholders while maintaining an investment-grade balance sheet and funding organic growth and targeted M&A. CFO Ken Parks emphasized that the combination of a larger, higher-margin backlog and better equipment pricing is what allows the company to both invest and step up returns without stressing the balance sheet.

Strategically, the company also sketched out growth beyond 2028. That includes more profitable, recurring Gas Power services revenue as the installed base ages into heavier service cycles; expanded use of AI, robotics, and automation in its own operations; and a pipeline of “breakthrough” technologies such as small modular nuclear reactors, carbon capture, solid oxide fuel cells, and grid technologies tailored to data-center and AI loads. The common thread is that GE Vernova sees itself as the default partner for high-voltage, highly engineered solutions in a world where hyperscalers and governments are capital constrained but power hungry.

Put together, the investor day did what it needed to do: it validated the stock’s massive rerating by resetting long-term numbers higher, showed that the AI power build-out is already flowing through backlog and cash flow, and signaled a willingness to share the spoils via dividends and buybacks. The wind business is still a drag and execution risk on a 20% margin target is non-trivial, but for now the market is treating GE Vernova as one of the cleanest pure plays on the AI-driven electrification super-cycle.