Where Cramer stands on GE Vernova after a buy-the-dip call from Goldman analysts
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Don’t jump the gun on buying more GE Vernova just yet. Despite a new buy-the-dip call from Goldman Sachs, Jim Cramer said Monday that the Club stock could still be weighed down by President Donald Trump ‘s fight against wind energy. Instead, he advised members to wait for more clarity on how the White House’s policies may impact GE Vernova’s overall sales. “The wind business is not going to grow as much,” Jim said during Monday’s Morning Meeting , citing Trump’s criticism of the wind power industry and promotion of fossil fuels. He added, “The president is not going to be giving anyone a break with wind plants.” In fact, Trump has called wind power the “worst form of energy,” even arguing that windmills “should not be allowed.” The White House has also issued executive orders to temporarily freeze new permits for wind projects, cancelled federal funding for the sector, and made it much harder to get tax credits. These are all risks to GE Vernova’s financials and its booming stock because the energy equipment maker has significant exposure to wind power. Nearly 28% of GE Vernova’s total revenue of $34.94 billion last year was wind, according to the company’s 2024 annual report . While up 3% on Monday and more than 80% in 2025, shares have dropped more than 9.5% since their record-high close above $644 on Aug. 6. GEV YTD mountain GE Vernova (GEV) year-to-date performance The wind business, one of GE Vernova’s three reporting segments, is slightly bigger than electrification, which represented around 22% of revenue in 2024. Both, however, pale in comparison to the power segment, which accounted for more than 50% of revenue last year. The power unit houses production of the company’s crown jewel gas turbines, which are highly sought after in a world of increasing energy demand due to artificial intelligence data centers, local manufacturing and industrialization, and electric vehicles. That’s why it was not surprising that shares of GE Vernova sold off last week after rival Mitsubishi Heavy Industries CEO Eisaku Ito told Bloomberg that the company plans to double its gas turbine production in two years to meet outsized demand. The upcoming influx of supply raised questions about pricing power in the industry. “While this has created investor angst and appears to be the reason GEV’s stock was sold off last week, we do not view this as a material risk to the industry,” Goldman Sachs said in a note to clients Monday. “Additionally,” they wrote, “we don’t believe GEV will plan to increase capacity in response unless demand for gas turbines is markedly higher and results in backlog representing closer to 5x revenues.” Last year, the backlog was just over three times revenue. The Goldman analysts, who advocated buying the pullback, also raised their GE Vernova price target to $715 per share from $686. Bottom line While reiterating our hold-equivalent 2 rating and $700 price target on GE Vernova, we would rather be patient and see if Trump’s disdain of wind power leads to lower wind equipment sales. If that does happen, any lost wind revenue could translate into additional sales of gas turbines, which we would see as a net positive. To be sure, GE Vernova has amazing growth prospects because of its gas turbine business, one of the biggest in the world. It has been at the heart of this year’s incredible run in the stock and our investment thesis. In fact, demand for GE Vernova’s gas turbines is so large , it’s hard for the manufacturer to keep up. Case in point: CEO Scott Strazik said during a spring earnings call that GE Vernova’s gas turbines are “largely sold out” for 2026 and 2027, while the company is “approaching filling out 2028 and starting to sign agreements for later years.” Candidly, we would like GE Vernova stock even more if the company increased production capacity for these turbines. After all, the AI boom isn’t going to die down anytime soon, as seen in increased capital expenditure plans from the so-called hyperscalers — those household name megacaps including Club holdings Amazon , Meta Platforms , and Microsoft . However, it is difficult to blame management for being cautious, given past boom-bust cycles in the industry. “When I spoke to Scott Strazik, begging him, literally begging him, to increase capacity, he said the last three times that people have done that it’s been a disaster,” Jim said on Monday. “I think he’s being prudent, but his prudence may turn out to be not aggressive.” Jim added, “Maybe this is the time that you really [do] need these plants.” Like Boeing , which we initiated Monday, GE Vernova’s products have been part of Trump’s deals with other nations to reduce their trade deficits with the U.S. One such agreement came back in May when the president visited Saudi Arabia and the kingdom committed to buying $14.2 billion of GE Vernova gas turbines. (Jim Cramer’s Charitable Trust is long GEV, AMZN, META, MSFT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. 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