GE Vernova's shares experienced a premarket drop of 2.7% and fell more than 8% in early Wednesday trading, moving below its 50-day line, despite reporting stronger-than-expected revenue and raising its full-year financial guidance for 2026. This decline was primarily attributed to its adjusted earnings per share of $2.47, which missed Wall Street's consensus estimate of $3.04, though it was still a 43% increase year-over-year. Revenue, however, grew 22% year-over-year to $11.1 billion, exceeding analysts' expectations of around $10.73 billion, driven by robust organic growth in its Power and Electrification businesses.
The company raised its 2026 revenue forecast to a range of $45.5 billion to $46.5 billion, up from the previous guidance of $44.5 billion to $45.5 billion, with the midpoint slightly above the analyst consensus of $45.45 billion. Furthermore, GE Vernova significantly increased its free cash flow forecast to between $11.5 billion and $12.5 billion, a substantial jump from its prior outlook of $6.5 billion to $7.5 billion. Second-quarter free cash flow reached $5.1 billion, surpassing the total free cash flow generated in all of 2025. Orders also saw significant growth, up 88% organically to $24.2 billion, with Electrification orders climbing 66% organically to $6.3 billion.
Despite the positive financial indicators and raised guidance, the market's reaction suggests that investor expectations, potentially fueled by the rapid growth in AI-driven power demand and GE Vernova's involvement, were even higher. The company's massive backlog, which grew by $13 billion from Q1 and totaled $176 billion, reflects strong demand across its Power and Electrification divisions, including over $5 billion in data center orders year-to-date, more than double 2025. However, the Wind division continued to face challenges, with revenue declining 10% year-over-year and EBITDA losses widening to $275 million, which weighed on overall performance. Analysts from Deutsche Bank and Guggenheim had recently raised their price targets for GEV stock, citing multiyear pricing power and the company's position in the AI energy landscape, yet the earnings miss overshadowed these growth points.
