Why GE Vernova Stock Popped Today

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GE Vernova stock jumped by a thrilling 6% through 11:52 a.m. ET on Tuesday, and it’s not exactly a mystery why. It’s not as though the stock market had some unexpected epiphany, like a squirrel suddenly understanding the stock-to-nut ratio. No, it turns out, it’s all because of a rather curious sequence of events that started with an earnings report.

After the closing bell on Monday, tech behemoth Oracle (ORCL), probably feeling somewhat rebellious, missed its earnings estimate for fiscal 2026’s first quarter. The report was somewhat disappointing, posting $1.47 per share when analysts had been expecting $1.48. However, in a dramatic turn of events-because who doesn’t love a good plot twist-Oracle’s CEO, Safra Catz, threw a wild prediction into the air: “Oracle Cloud Infrastructure revenue will grow 77% to $18 billion this fiscal year,” she said, sounding like she might also predict that the moon will turn into a giant piece of blue cheese, just because why not. Oracle’s stock, predictably, surged more than 41% the following day, as if the heavens themselves had opened, and investors, gripped by the wild allure of AI, began scrambling for anything remotely connected to it.

This, of course, sent investors into a kind of whimsical dance, linking Oracle’s cloud-based AI ambitions to the suppliers of power for data centers-such as GE Vernova, who, in case you didn’t know, make nuclear reactors. Yes, those huge, rather intimidating machines that generate electricity. The connection, while indirect, was enough to send GE Vernova’s stock rocketing. And so, there they were, assuming that if Oracle’s sky-high predictions come true, GE Vernova’s stock will too. An utterly reasonable assumption. (Well, that’s what they thought anyway.)

What Oracle Said Last Night

Oracle’s “miss” on earnings really isn’t a big deal-at least, not when you consider that the entire episode was overshadowed by the company’s CEO basically announcing that Oracle’s AI-powered cloud services would grow at a pace that could only be described as “ambitious.” According to Catz, Oracle’s cloud revenue will swell by 77% to a neat $18 billion this year. This is followed by projections that send investors into a whirl of excitement, suggesting that revenue could reach $32 billion, $73 billion, $114 billion, and $144 billion in the next four years. It’s an optimistic forecast-one that might have made a few other companies look at their own numbers and think, “Maybe we should invest in some unicorns.”

However, here’s where the absurdity of all things financial takes a dramatic turn. Catz claims Oracle will see a 14x revenue growth over five years. Investors, eager as puppies, are looking at this through rose-tinted glasses, assuming that if Oracle’s AI business takes off like an overly caffeinated rocket, it will do wonders for everyone in the supply chain, even if their connections are rather tenuous. And that includes GE Vernova, apparently. Whether it makes sense or not.

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Is GE Vernova Stock a Buy?

And so, here we find ourselves. Investors, with the fervor of a thousand caffeinated squirrels, are buying GE Vernova stock on the basis that if Oracle’s AI cloud plans succeed, everyone involved in the process-no matter how obscure-will benefit. But, and here’s the rub: Oracle’s CEO, despite her rather grandiose predictions, only expects earnings growth of 14x over five years. Meanwhile, analysts, the seasoned, grizzled veterans of the investment world, are forecasting a much less extravagant future for GE Vernova. They predict earnings will grow by a mere 5x by 2030, bringing it to $41.28 per share.

Now, let’s break this down. A 5x increase in earnings by 2030 equates to a respectable, but hardly mind-bending, 38% annual growth rate. Not bad. But here’s the kicker: GE Vernova’s stock is currently trading at a rather heady 140 times earnings, which, for the uninitiated, is a bit like buying a $500 bottle of water because you heard it was made by a company that also sells solar panels. The Price/Earnings Growth (PEG) ratio stands at a lofty 3.8. In other words, the stock is expensive-no matter how optimistic Oracle’s predictions might sound.

So, is GE Vernova stock a buy? Well, let’s just say that if you’re the sort of person who believes in the miraculous synergy of AI and nuclear reactors, you might want to grab some. But for those of us who prefer to make our investments based on solid fundamentals and not wishful thinking (or the notion that artificial intelligence will, in the near future, wake up and decide to power the world from the moon), this stock might just be a tad… rich.

In conclusion: Sell.

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2025-09-10 19:27