Is GE Vernova the Smartest Investment You Can Make Today?

Sometimes the best investments are the ones you already know about. It hasn't been a secret that GE Vernova's (NYSE: GEV) business has been strengthening. Global energy demand and the artificial intelligence (AI) revolution have driven the company's shares up by more than 160% over the last year.

That doesn't mean it's too late to buy the stock, though. Here's why.

Image source: The Motley Fool.

Focus on the multi-year outlook

The global energy company, spun off from General Electric in 2024, is a leader in sustainable energy, including renewable energy sources such as wind, solar, and hydroelectric power, as well as grid solutions that help integrate energy sources into existing energy systems. GE Vernova offers a broad range of approaches, from gas and hydro turbines and generators to providing advanced nuclear reactors, fuel, and nuclear services.

Yet after such a strong run in the stock over the past 12 months, investors may wonder why it still makes sense to buy the stock today. The answer is the outlook for 2026 and beyond. In its latest earnings report, management increased 2026 revenue estimates by over 7% and free cash flow by $500 million.

Perhaps more importantly, the company raised its revenue and cash flow outlook into 2028. It also sees profitability continuing to grow. Guidance calls for EBITDA (earnings before interest, taxes, depreciation, and amortization) margins from the low teens this year to 20% by 2028. The company is planning annual revenue growth across all three divisions -- power, wind, and electrification -- of between 10% and 20% over the next several years.

Backlog and margins

Company management can make those predictions thanks to visibility into its order book and backlogs. Orders, for example, soared 65% in the fourth quarter, with growth across all segments. That was an acceleration from earlier 2025 growth. Summarizing the full year, GE Vernova CEO Scott Strazik said:

We increased our backlog to $150 billion, with better equipment margins, and are entering 2026 with significant momentum. Our platform of advanced solutions is well positioned to serve the growing, long-cycle electric power market, and there is substantial opportunity to deliver even better performance ahead.

The real data on renewables

While not its largest segment, GE Vernova's wind business is an indication of the company's broad reach. In a political period when renewable energy, and wind in particular, has seemingly been out of favor in the U.S., that segment still accounted for nearly 25% of revenue in 2025.

It might surprise readers how much renewable energy is still being harnessed in the U.S., especially in states typically categorized as very conservative. For example, Florida and Texas produced 10.5% and 32% of their power from renewable sources, respectively, in 2025, according to recent research from The Motley Fool.

While the wind segment saw the slowest increase in new orders and even declining sales in 2025, it provides investors with an area to watch for potential growth.

Still a buy

Investors may be hesitant to buy a stock that has jumped so much in such a short time. Looking ahead, and not back, can be difficult with investing. GE Vernova stock makes for a good candidate to buy in thirds. Shares are about 6% off recent highs, so putting about one-third of the amount one wants to allocate to the stock makes sense today.

Being patient and adding the rest over the next several months could yield a lower cost basis. If the stock doesn't provide that opportunity and keeps rising, at least you have some amount invested.

The stock is relatively expensive with a forward price-to-sales ratio of about 5. That's why it's reasonable to think shares might fall some. In the long run, though, GE Vernova has a solid business with large backlogs and a broad enough scope to weather inevitable slowdowns.

Howard Smith 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.