Jim Cramer urges discipline on GE Vernova as Wall Street analysts get more bullish
Wall Street analysts increasingly jumped on the GE Vernova bandwagon during a volatile week for stock and AI trading more broadly. Jim Cramer urged caution. Shares of the energy equipment maker rose more than 4.5 percent on Thursday after falling 10.5 percent in the previous session as shares tied to artificial intelligence data centers were crushed. Undeterred, Jefferies has become the latest shop to revamp GE Vernova, a leading manufacturer of natural gas turbines that can be connected to energy-intensive AI plants to produce more power. Analysts upgraded the stock to buy from hold and raised the price target to $815 per share from $736. They predicted a shift in turbine orders and pricing in the current fourth quarter and called for more upfront and meaningful free cash flow generation. Jefferies’ new price target implies a 33% upside from Wednesday’s close of $614, which more than wiped out last week’s post-investor day rally. “I don’t think this stock that I love and that should be at $700 is just another call for discipline for people who want to build endless data centers,” Jim said on “Squawk on the Street.” He suggested that recent trading in GE Vernova shares epitomizes the short-term fickle nature of investors’ appetite for holding companies that are heavily reliant on AI spending commitments that may or may not come to fruition. Jeff Marks, the club’s director of portfolio analysis, suggested the fluctuations in GE Vernova shares meant buyers needed to be more careful about the price. “Wait for one of those big, bad days to buy,” Marks said during Thursday’s Morning Meeting. We said on Wednesday that if GE Vernova fell to $600, we would buy back some of the shares at $694 that we sold on strength on Monday. Zoomed out, Jim agrees that GE Vernova’s long-term story remains compelling. The company is undoubtedly a “home run” in 2025, with the stock nearly doubling year to date. But he is less optimistic than Jefferies about turbine pricing. “They increased the capacity, but you can’t get one until 2030,” Jim said. With customers already locked in to previous prices, he continued: “You don’t have a lot of pricing power if you’re sold out.” GEV YTD mountain GE Vernova YTD Jefferies’ bullish call on Thursday was followed by a handful of others this week. Morgan Stanley on Tuesday raised its price target to $822 from $710 while reiterating its buy rating and highlighting that GE Vernova is at the heart of powering artificial intelligence data centers. Wells Fargo also raised its price target on GE Vernova from $717 to $831 for the same reason. Evercore ISI on Monday initiated coverage of GE Vernova with a buy and $860 price target. Analysts said the company has a risk of “picking and shoveling” many end markets in addition to its data centers. Sentiment in the stock increased after GE Vernova offered strong long-term guidance during its evening investor update on Dec. 9. The next day, the stock closed at a record high of $723, up 15.6%. At that time, we raised our GE Vernova price target to $800 per share from $700 and reiterated our buy-equivalent 1 rating. As part of Monday’s trading, we downgraded the shares to a hold equivalent of 2 but kept our price target steady. (Jim Cramer’s Charitable Trust is long GEV. See here for a full list of stocks.) When you subscribe to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trading alert before buying or selling a stock in his charitable foundation’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.
