GE Vernova's $197 Billion Backlog, $9 Billion Acquisition, and One Clear Strategy

In 2024, Siemens Energy (OTC:SMERY)(OTC:SMEGF) was losing billions of dollars in its wind business. It had to sell non-core assets to free up cash. One of them was Trench Group, a company specializing in high-voltage grid components. The price was undisclosed.

Now, GE Vernova (NYSE:GEV) has agreed to buy that same company from investment firm Triton Partners for a whopping $9 billion.

That one fact tells you almost everything about the artificial intelligence (AI) power business today. What it still doesn't reveal is the scale and pace of GE Vernova's growth.

Image source: Getty Images.

Big acquisition, bigger backlog

GE Vernova is the world leader in natural gas and wind turbines. Nearly 25% of all the electricity generated globally passes through its equipment.

It just posted third-quarter numbers, and they're staggering. Orders jumped 96% organically, and backlog grew by $20 billion in a single quarter to reach $197 billion. Management now expects backlog to surpass $200 billion in Q4. That's more than five times the company's 2025 revenue.

Simultaneously, management announced a $9 billion deal to acquire Trench. GE Vernova will pay half in cash and half in debt, and it expects the deal to close in late 2027.

The Trench deal is a masterstroke

GE Vernova operates three businesses:

• Power: gas and steam turbines, nuclear and hydro power
• Electrification: grid solutions, power conversion, high-voltage equipment
• Wind: onshore and offshore wind turbines.

Power is the largest segment, but electrification is the fastest-growing. It generated roughly 32% of the company's total revenue in the nine months through Sept. 30, 2026, but logged 59% revenue growth.

AI data centers require a massive, constant power supply that traditional grids weren't built to handle. GE Vernova sells the high-voltage transformers, switchgear, and control systems needed to plug these facilities directly into the high-voltage transmission lines.

Supply is so scarce that industry lead times for equipment like transformers now stretch into years. Securing key components is a battleground, so GE Vernova is pulling off a masterstroke: buying the supplier itself.

Trench makes bushings, instrument transformers, and coils, or the kind of parts that go into transformers and other equipment. It serves more than 800 utilities and hyperscalers worldwide, has manufacturing facilities across North America, Europe, and Asia, and brings a backlog of nearly $5 billion.

It is already a GE Vernova supplier, and supplies to Siemens Energy and Hitachi's (OTC:HTHIY) arm, Hitachi Energy, too. So by acquiring Trench, GE Vernova locks up its own supply chain while seizing control of a major bottleneck for two of its biggest grid rivals.

It's a clear strategy: own the AI build-out bottleneck.

What this means for GE Vernova investors

GE Vernova raised its full-year targets for sales, profit margins, and cash flows. It exited Q3 with $16.8 billion in cash and generated $5.4 billion in free cash flow, up from only $732 million a year ago. Customers are paying cash upfront to reserve turbine slots years in advance.

All of that money gives the company significant leeway to spend on growth and return cash to shareholders. Earlier this year, it bought the remaining stake in transformer maker Prolec GE. It is now buying Trench, and management just doubled its stock buyback plan to $20 billion.

GE Vernova's backlog gives it multi-year revenue visibility few industrial companies can match. The stock's still down nearly 17% in six months, as of this writing. This is one company the market isn’t pricing right.

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.