Key Points

The AI data center sector faces surging electricity needs, driving demand for large power generation systems.
GE Vernova offers these solutions, which helps explain the strong stock gains seen this year.
Analysts may focus on longer horizons than typical investors, opening a potential window.

Every investor knows a stock cannot rise forever. At some point it will crest and pull back.

That situation confronts anyone holding or considering GE Vernova (NYSE: GEV). After a 560 percent advance in the past 24 months, the shares appear closer to a peak than a base. Current owners may eye profit taking, while potential buyers await a dip. Those moves could prove sensible.

The analyst community, however, points to a more constructive near-term stance.

Image source: Getty Images.

GE Vernova gains align with fundamentals

GE Vernova operates as the power unit spun from the former General Electric breakup that started in 2023. The company builds wind turbines, grid gear, and nuclear equipment.

Its fastest-growing segment centers on natural gas turbines for utility-scale output.

Explosive electricity demand from AI data centers caught utilities off guard, prompting operators to secure their own supply. Gas turbines deliver a tested, relatively fast option. The gas power backlog rose from 83 gigawatts to 100 gigawatts in the first quarter and is projected to hit 110 gigawatts by late 2026. That momentum supports expected company revenue growth of 19.5 percent this year and 14 percent next year. Capacity constraints remain the main hurdle, though expansion plans are underway.

The stock rally stems from the clear, ongoing power shortfall tied to AI, with no quick fix in sight. Goldman Sachs forecasts U.S. AI-related electricity demand will double from 2025 to 2027, a trend hard to ignore.

Analysts have incorporated this outlook into their 12-month price target of 1,226.85 per share, implying 14.4 percent upside from current levels. Most still rate the shares a strong buy after the long advance, leaving room for further gains.

Stay patient without waiting for a bargain

Even if the shares reach the target on schedule, the path will likely include volatility. The recent 8.6 percent drop from the late-June high could extend before stabilizing.

Avoid holding out for the precise low point. Timing the exact bottom is impossible in advance, and the greater risk lies in entering too late rather than slightly early.

Should investors add GE Vernova shares now?

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James Brumley holds no positions in mentioned stocks. The Motley Fool maintains positions in and recommends GE Vernova and Goldman Sachs Group. A disclosure policy applies.

Views expressed are those of the author and may not reflect those of Nasdaq Inc.