GE Vernova drops 11% in May as data center pushback mounts

GE Vernova shares fell 10.6% in May after the chief executive officer flagged growing state opposition to data center projects, erasing some of a 255% rally.

"You're seeing more and more states that are certainly pushing back," Chief Executive Officer Scott Strazik said at the Bernstein Strategic Decisions Conference on May 27. "We do have customers that are struggling to get projects across the line."

The decline came despite stellar operational results. GE Vernova's gas power equipment backlog and slot reservation agreements jumped to 100 gigawatts from 83 GW, with management expecting to exceed 110 GW by year-end. Total backlog reached $263 billion in the first quarter, and the company raised its 2026 revenue guidance to $44.5 billion to $45.5 billion, implying 18% growth at the midpoint. First-quarter orders surged 71%.

The tension pits a $150 billion backlog against a regulatory environment that is making it harder to convert pipeline into signed orders. Data centers, which consume as much electricity as small cities, represent one of GE Vernova's most direct growth opportunities. When projects stall at the state level, equipment orders get delayed.

States Push Back as Data Center Boom Strains Grids

More than 300 bills have been introduced in state legislatures this year to rein in data center construction, including 11 states where lawmakers proposed outright bans, according to a report from E&E News. The pushback spans both parties, with concerns ranging from grid strain and electricity rate hikes to environmental impact.

The resistance has scrambled political alliances. Labor unions, typically aligned with Democrats, have emerged as unlikely defenders of data center projects, arguing the facilities create high-paying construction jobs. In Colorado, union opposition helped sink a bill that would have imposed clean energy requirements on data centers. In Illinois, a push by Governor JB Pritzker to pause tax incentives for two years faced pushback from the International Union of Operating Engineers Local 150.

For GE Vernova, the regulatory friction compounds existing headwinds in its wind business. Tariff uncertainty has frozen fresh onshore wind orders in the U.S., even as the company maintains guidance to ship 1,500 turbines in 2026. Strazik said order flow will remain frozen until Washington provides tariff clarity.

Wall Street Remains Bullish Despite Near-Term Risks

The pullback has not shaken analyst conviction. Goldman Sachs raised its price target on GEV to $1,328 from $1,000 in late April, maintaining a buy rating. Jefferies lifted its target to $1,350, and Baird set a target at $1,400. Of 35 analysts covering the stock, the consensus is buy with an average 12-month price target of approximately $1,217, implying more than 25% upside from current levels near $968.

The bear case centers on capacity constraints. BNP Paribas Exane downgraded GEV to neutral from buy in late April, noting that approximately 90% of the company's gas turbine capacity is already contracted through 2030. With production lines full through 2029, fresh order flow above current guidance is hard to envision in the near term.

Strazik offered one reassurance: when his team maps customer project pipelines against equipment already secured, the company sees no risk to fulfilling its existing backlog commitments. The question is what happens after that backlog is built.

The decline puts GE Vernova shares well below their 52-week high of $1,181.95. For long-term holders, the core thesis — GE Vernova as the critical infrastructure layer of the AI power buildout — remains supported by its backlog and order momentum. The next catalyst is the pace of state-level permitting decisions, which will determine how quickly the pipeline converts to revenue.

This article is for informational purposes only and does not constitute investment advice.