Gas Turbine Prices Are on Track to Nearly Triple. These Stocks Are Cashing In.
Key PointsGas turbine prices have surged, boosting related stocks like GE Vernova.
For several years, natural gas has experienced a resurgence, spurred by the demand for power generated by artificial intelligence data centers. This shift has led to significant boosts in the stock prices of prominent gas turbine and services companies, such as GE Vernova, Siemens Energy, and Mitsubishi Heavy Industries. In fact, gas turbine prices have surged by 195% since 2019, as highlighted by Wood Mackenzie, an industry leader.
Additionally, GE Vernova's performance obligations, primarily driven by order growth, have reached an impressive $176 billion and are projected to hit $200 billion by 2027. This nearly-doubling trend is supported by the company's higher-margin services, long-term service agreements, and a rapidly expanding installed base of gas turbine equipment.
Moreover, the increased backlog of orders and slot reservation agreements among customers indicate strong demand, leading to higher cash flows. To capitalize on this theme, investors can consider a balanced approach by combining stock in GE Vernova with a lower-risk exchange-traded fund, such as the Global X MLP & Energy Infrastructure ETF (MLPX), which provides broad-based exposure to natural gas and related infrastructure.
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