Key Takeaways:
- GE Vernova guided fiscal 2026 free cash flow of $11.5B to $12.5B.
- Q2 orders likely topped $18B as hyperscaler gas turbine demand accelerates.
- Turbine capacity is sold out through 2027, giving the company pricing power.
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GE Vernova guides $11.5B-$12.5B free cash flow on AI power demand
GE Vernova guided fiscal 2026 free cash flow of $11.5 billion to $12.5 billion, signaling strong cash generation from AI-driven power demand.
"GE Vernova is benefiting from unprecedented demand for gas turbines and grid equipment as hyperscalers race to power AI data centers," Andrew Obin, analyst at BofA Securities, said.
The guidance came alongside the company's Q2 2026 earnings release. Revenue reached $10.84 billion, up 18% from a year earlier, while adjusted EBITDA came in at $1.21 billion. The free cash flow outlook of $11.5 billion to $12.5 billion compares with the prior guidance range of $6.5 billion to $7.5 billion, reflecting a sharp upgrade driven by order momentum and pricing leverage.
Shares of GE Vernova have surged 65% year to date, giving the company a market value exceeding $300 billion. The raised cash flow guidance implies management sees AI infrastructure spending continuing to compound, with turbine slots already booked into 2030.
The company's Power segment booked 13 gigawatts of gas turbine orders and slot reservations in Q2, according to BofA Securities estimates. Electrification revenue jumped 60% to $3.47 billion, boosted by the full consolidation of Prolec GE. Wind revenue declined 16% to $1.88 billion, reflecting persistent weakness in the US onshore market.
GE Vernova's gas turbine backlog plus slot reservations now stands at 100 gigawatts, with the company targeting 110 gigawatts by year-end. The capacity constraint has given the company unusual pricing power, with customers paying premiums for the earliest available delivery slots.
The company also secured contracts with Stromnetz Berlin to install SF6-free substations, expanding its role in European grid modernization.
The guidance raise signals management expects AI data center demand to sustain its rapid growth trajectory. Investors will watch the Q3 earnings call for updates on the 110-gigawatt backlog target and Electrification segment margins.
This article is for informational purposes only and does not constitute investment advice.
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