GE Vernova's gas turbines aren't the only way it's winning from the AI boom

An important development from the financial markets: For more than a year, GE Vernova 's rally has been fueled by one narrative: hyperscalers' insatiable appetite for its gas turbines to supply power to data centers. Look past the headlines, however, and you'll find a lesser-known part of the company that is quickly emerging as a critical piece of the AI buildout. GE Vernova's electrification division, which manufactures the transformers, switchgear, and grid software required to connect data centers to the broader electrical grid, has quietly become the company's fastest-growing business.

In the first quarter of 2026, the segment booked $2. 4 billion in data center equipment orders, exceeding the total for fiscal year 2025. " doesn't get talked about enough," said Jeff Marks, the Investing Club's director of portfolio analysis.

Economic Details

"Everyone thinks of the company as a heavy-duty turbine business, but modernizing the grid to support an increasingly electrified world presents a significant opportunity. " Electrification accounted for nearly 32% of overall revenue last quarter. Power, which makes the popular gas turbines that support the AI buildout, is the company's largest segment, bringing in over 53% of revenue.

Meanwhile, wind is the smallest and accounted for about 15% last quarter. Much of that comes from sales of offshore and onshore wind turbines. However, electrification has quietly ballooned into a juggernaut with a $42 billion backlog, up from just $9 billion at the end of 2022.

For comparison, GE Vernova reported a total backlog of $163 billion at the end of the March quarter, but expects that figure to hit $200 billion by the end of 2027. Driving that growth is the accelerating demand for electricity, following nearly two decades of relatively flat growth. While modernizing an aging grid and manufacturing reshoring play a part, the AI boom is causing the most significant spike in power demand.

Analyst Views

Consulting firm ICF forecasts a nearly 39% jump in U. electricity demand by 2035 as a result. That's because tech companies are investing billions to build out energy-intensive data centers to meet their AI ambitions.

Club holdings and hyperscalers Meta Platforms , Alphabet , Amazon , and Microsoft have all aggressively raised capital expenditures to keep pace in the heated AI arms race. Rather than generating power (the job of those aforementioned gas turbines within the power division), the electrification business builds the infrastructure needed to transport electricity from where it is generated to where it is consumed. "There is a terrific demand from the hyperscalers to get connected faster than the power utilities are capable of doing," GE Vernova electrification CEO Philippe Piron told CNBC in an interview.

GE Vernova further expanded its electrification business in February by acquiring the remaining stake of transformer manufacturer Prolec for $5 billion. Transformers act as the vital link to these data centers, fueling a massive wave of new orders for the segment.

Economists are analysing what the news means for the markets.