Why the Market May Be Missing GE Vernova’s Quiet Transformation

Key Takeaways

• GE Vernova’s (Ticker: GEV) core turbine business remains exceptionally strong, with accelerating orders, expanding margins, and backlog visibility extending through the end of the decade.

• Beneath the surface, the company is evolving from a gas-turbine-centric equipment manufacturer to a diversified energy infrastructure platform, anchored by its Electrificiation division and growing services franchise.  

• Electrification revenue has nearly tripled revenue in four years, materially changing the company’s growth outlook.

• Services now account for more than 55% of total backlog, enhancing earnings visibility and margin resilience.

More Than a Turbine Company

GE Vernova’s core turbine business is well understood and Q4 earnings once again supported the bright fundamentals. Orders increased 77%, margins expanded, and the backlog reached nearly $100bnⁱ. Turbines are nearly sold out through the end of the decade.  

Yet, beneath the surface, GE Vernova is undergoing a structural shift—from a gas-turbine-centric manufacturer to a diversified energy infrastructure platform, anchored by a fast-growing Electrification (Grid) business and a durable services franchise.

The Electrification Inflection

Electrification provides the clearest evidence of this shift. GE Vernova has been building the Electrification division over time, in part through acquisition, to focus on grid solutions and software. In the fourth quarter, the strength of the division was on full display, with impressive order growth driving a 2.5x book-to-bill ratioⁱ. This ratio measures orders relative to revenue; a ratio above 1x signals an improving demand outlook.

Source: GE Vernova Q4 2025 Earnings Presentation

Demand is being driven by grid modernization efforts: Synchronous condensers, substations, switchgear, and HVDC equipment—the critical infrastructure required to connect new power generation (including renewables and data center backup) to the grid. 

"Electrification generated about $5 billion in revenue in '22 and we now expect that number to be $13.5 billion to $14 billion in '26 and we are just getting started. But this isn't about growth for growth's sake. In the last three years alone, we've more than doubled our equipment backlog, adding over $14 billion in future margin dollars in this backlog, while adding $13 billion in high-margin services backlog over the same period."

CEO Scott Strazikⁱⁱ 

The Undervalued Services Story

Services now account for more than 55% of GE Vernova's total backlogⁱ. Once a turbine or substation is installed, the operator typically signs long-term service agreements that generate steady cash flows for decades. 

The combination of a growing equipment business and an expanding services annuity is particularly powerful. It means GE Vernova isn't just booking orders—it's locking in future margin dollars while simultaneously building a base of recurring revenue.

Why This Matters for Investors

GE Vernova is often categorized as a power generation company—and it is. But the rapid scaling of Electrification, combined with the growing services annuity, is transforming the quality and durability of the business. The market may still be valuing GE Vernova as a cyclical equipment maker, even as the business increasingly resembles a diversified infrastructure platform with multi-decade demand visibility. 

For investors seeking exposure to the electrification of the global economy, Tema's Electrification ETF (VOLT) offers a pure-play way to invest in rising electrification demand through a portfolio of utilities, equipment, nuclear, and clean energy companies. GE Vernova is among the holdings in the portfolio.*

For more of our research and insights on electrification and more, view and subscribe to our insights.

*Portfolio holdings are subject to change. For a full, up to date list of holdings, visit the VOLT fund page.