Why GE Vernova Stock Fell Nearly 11% in May
Key Points
GE Vernova's order book and backlog are growing at a torrid pace on booming demand from data centers.
Management, however, flagged growing pushback from more states resistant to new data center construction.
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GE Vernova (NYSE: GEV) is the world's largest manufacturer of natural gas turbines. The company is firing on all cylinders, winning several orders in recent weeks and raising its 2026 guidance in late April after a staggering 71% surge in first-quarter orders.
Yet, the stock slumped 10.6% in May, according to data provided by S&P Global Market Intelligence, and has extended those losses further in June.
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This begs the question: Is there something beneath the surface that investors are missing?
Image source: Getty Images.
GE Vernova is growing rapidly
Every operational update coming from GE Vernova in recent weeks underscores stellar growth. Its gas power equipment backlog and slot reservation agreements (SRA) jumped from 83 gigawatts (GW) to 100 GW, with management expecting to cross 110 GW by the end of the year.
SRAs are binding contracts in which power producers deposit 20% to 25% of a turbine's total value upfront just to lock in future manufacturing capacity. Led by artificial intelligence (AI) data centers, demand is so intense that GE Vernova's production lines are full for years. Customers looking for a new natural gas turbine today face a waiting list stretching to 2029, forcing utility providers to aggressively secure manufacturing slots for 2029 and 2030 right now.
GE Vernova's total backlog hit $263 billion in Q1, and it now projects 18% revenue growth at the midpoint for 2026.
So what's going on with the stock price? Two developments seem to have stalled its recent momentum.
Why GE Vernova stock is falling, and what you should do
At the Bernstein Strategic Decisions Conference in late May, GE Vernova CEO Scott Strazik sounded a cautious note regarding data center power projects. Strazik pointed out how more U.S. states are beginning to push back against new data centers because of factors such as severe grid strain and subsequent electricity rate hikes. Some of GE Vernova's customers are even struggling to advance and complete projects due to mounting local and regulatory hurdles.
Wall Street perceived Strazik's comments as a reality check. Because GE Vernova stock was already trading at a massive premium after a meteoric 255% rally in the one year through April 2026, any hint of slower project execution became an immediate trigger for investors to lock in profits.
Meanwhile, GE Vernova's legal dispute with Spain's Iberdola over the Vineyard Wind offshore project has escalated. GE Vernova attempted to exit the project, citing $360 million in unpaid invoices, but the developer countersued to block the exit, claiming over $1 billion in damages and losses from a 2024 wind turbine blade failure. A Massachusetts judge has now ordered GE Vernova to stay on the job or settle the dispute through arbitration.
While the dispute may have exacerbated the decline in GE Vernova stock, it is not a structural concern. Instead, the drop is mainly profit-taking after a massive run. Given the company's leadership in electrification and its massive backlog, GE Vernova remains an incredibly strong long-term play and a buy on every pullback.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GE Vernova. The Motley Fool has a disclosure policy.
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