GE Vernova, the power-equipment maker spun out of General Electric in 2024, sells heavy-duty gas turbines into a market where the queue has become longer than the product. In the June quarter it contracted 20 gigawatts of gas equipment. Only 2 GW of that was a firm order.

A queue that outgrew the order book

The other 18 GW were slot-reservation agreements — a customer pays to hold a manufacturing position while final terms are still being negotiated. Total gigawatts under contract went from 100 to 116, and the company is targeting at least 125 GW by year-end. But the composition matters more than the total: firm gas equipment backlog is 53 GW, while reservations stand at 63 GW. Management expects firm backlog to exceed reservations in the second half of 2026. That inversion is the single observable on which the equipment-revenue case rests.

The reason customers pay to queue is that there is nowhere else to go. Three firms build heavy-duty turbines — GE Vernova, Germany's Siemens Energy and Japan's Mitsubishi Heavy Industries — and waits now run five to seven years depending on frame class. Scarcity has moved price: GE Vernova guided 2026 gas orders to price 10 to 20 points above the fourth quarter of 2025, and industry turbine prices are projected to approach $600 per kilowatt by end-2027, close to triple 2019 levels.

Siemens Energy runs the same book differently, capping its reservation agreements at 10-20% of contract value and describing them as down payments that lapse if the turbine is never bought. It also deliberately held data centers to 20% of last quarter's gas turbine orders — the same share GE Vernova reported, but reached by rationing rather than by demand.

Scarcity is also being spent. GE Vernova is lifting its Greenville, South Carolina plant from 3 to 5 GW a quarter beginning this quarter, and raising output of its HA-class machines from 37 units in 2025 to 74 in 2027. Every added slot erodes the wait that justifies today's pricing.

The numbers underneath

Second-quarter revenue was $11.1bn, up 21.9% and accelerating from 16.1% the quarter before. Gross margin widened to 21.3% from 20.3%. Operating income rose 73%, more than three times the pace of sales. The Power segment earned an 18.8% EBITDA margin, up 320 basis points, against a group full-year guide of 12-14%. Orders of $24.2bn were up 88%, and equipment backlog — not services — grew 77% to $88bn. Free cash flow guidance was raised from $6.5-7.5bn to $11.5-12.5bn. The drag is Wind, where orders fell 40% and the segment lost $275m of EBITDA in three months.

The shares were up 11.5% over the trailing month as late as 17 August. Then they fell 12.7% in four sessions, 8.6% of it on 18 August alone — the day the 30-year Treasury yield touched 5.323%, a 19-year high. Nothing came out of the company. The whole behind-the-meter power complex went down together that session, alongside an analysis of hyperscaler filings putting roughly $3trn of off-balance-sheet obligations across nine AI-spending companies.

What the slot is worth

Earnings are not a usable anchor here: a one-off gain lifted first-quarter net income to $4.75bn. On price per dollar of trailing gross profit, GE Vernova trades at 30.5x, down from about 36.2x in May and back near its February level. Siemens Energy fetches 15.1x and Mitsubishi Heavy 12.1x on the same measure, with the same order book in front of them. The de-rating has been real and has not closed the gap.

The rest of the prime-mover layer is cheaper and, in places, growing as fast. Cummins, the engine maker whose Power Systems arm builds standby generator sets, posted record segment revenue of $2.3bn, up 19% at a 24.5% EBITDA margin, and is booking 95-litre orders into the second half of 2028; it trades at 9.23x trailing gross profit. Caterpillar's power generation revenue rose 72%, and it is restarting a 10-MW reciprocating engine it discontinued in 2022. Generac, long a residential standby brand, booked $100m of data-center revenue in the quarter against residential sales down 2%. Bloom Energy, which sells solid-oxide fuel cells that make electricity from gas without combustion, delivered its first $1bn quarter at a 37.2% product gross margin — but discloses no shipped data-center megawatts, and its diluted share count rose 37.6% in four quarters.

One constraint sits upstream of all of them. US gas production has a near-term ceiling around 128-132 billion cubic feet a day, and LNG exports are set to more than double by 2030. The levelized-cost models underwriting today's turbine orders assume a flat mid-$3s gas curve. If they are wrong, 63 GW of reservations is where it shows up first.

The setup

Where it stands — GE Vernova's order growth is in equipment, not services, but more than half the gas book is still reservations rather than firm orders. Would confirm — Firm gas equipment backlog exceeding 63 GW of slot reservations when third-quarter results are reported. Would invalidate — Gigawatts under contract stalling below the 125 GW year-end target, or reservations lapsing without conversion. Watch next — Third-quarter results in late October, with Power guided to 17-19% revenue growth at a 17-18% margin. Valuation — 30.5x trailing gross profit and 27.3x forward, against 36.2x in May, Siemens Energy at 15.1x and Mitsubishi Heavy at 12.1x.