Gas Turbine Prices Are on Track to Nearly Triple. These Stocks Are Cashing In.
Demand for heavy-duty gas turbines to power AI data centers is a feature of the global economy.
Overview
After an extremely difficult period at the end of the past decade, when the market wrote off fossil fuels in favor of renewable energy, natural gas has come back in a big way, driven by demand for power from artificial intelligence (AI) data centers. That's sent shares of the leading gas turbine and services companies GE Vernova (NYSE: GEV), Siemens Energy, and Mitsubishi Heavy Industries soaring in recent years. They still offer excellent ways to gain exposure, as does a lower-risk exchange-traded fund (ETF) such as the Global X MLP & Energy Infrastructure ETF (NYSEMKT: MLPX). Here's why buying both gives balanced exposure to the investing theme.
According to leading industry analyst Wood Mackenzie, gas turbine prices have increased by 195% since 2019. It's a remarkable turnaround, and it's evident in the growth of GE Vernova's remaining performance obligations (RPO) during that period. It currently stands at $176 billion and, based on its order pipeline, Chief Executive Officer Scott Strazik is confident it will reach $200 billion in 2027, representing a near-doubling from 2022.
Data source: GE Vernova. Chart by author.
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Originally published at www.fool.com.