Why Jim Cramer thinks GE Aerospace and GE Vernova are poised for success

GE Aviation And GE Vernova CNBC’s Jim Cramer said it could continue climbing because the two companies’ products are relevant around the world and could be useful amid trade tensions.

“Ultimately, both GE Aerospace and GE Vernova are poised to be the winners of the president’s trade war, because when other countries decide to play nice with Trump by narrowing their trade deficits with us, they need to make a lot of big-ticket purchases to really move the needle,” he said. “That means they have to buy airplanes and…they have to buy turbines.”

together with GE HealthcareBoth companies are subsidiaries of General Electric. The holding officially completed its separation into three separate companies last year.

Both GE Aerospace and GE Vernova are important parts of the broader economy, Cramer said.

GE Aerospace manufactures jet engines and aircraft parts and also does repair and maintenance work. Cramer noted the outfit’s many positives quarterly reportThat includes growth in its largest segment, the commercial engines and services business. He also said he liked the administration’s comment about improvements to the supply chain, which he said are particularly important given the current high tariff environment.

Cramer also noted that Korean Air agreed to buy 103 aircraft from Korea last quarter. Boeing’sMany will include GE Aerospace Engines. This is the largest Boeing jet order in the air carrier’s history.

Cramer claimed that GE Aerospace is “one of the best ways to play the incredibly strong bull market in aviation and travel.”

Energy name GE Vernova succeeded exceed predictionsCramer said he praised the energy business and the decision to fully acquire Prolec, a company that makes equipment for the electric grid. The acquisition helps grow GE Vernova’s electrification segment because data center construction increases electricity needs, Cramer said. Cramer was also impressed by GE Vernova’s strong backlog growth, saying the metric provides direct insight into the level of demand for the company’s products.

Cramer argued that GE Vernova is also “one of the safest ways” to invest in nuclear energy because the company actually builds nuclear power plants. He noted that speculative interest in nuclear energy has increased and most risky stocks have fallen recently. New facilities can take a long time to reap the rewards, Cramer continued, because it can take more than a decade to build them.

Despite beating Wall Street’s expectations, both companies sold off immediately after reporting earnings earlier this week but have largely recovered since then. GE Aerospace is currently up 83.70% year-to-date, while GE Vernova is up 80.94% year-to-date.

“When General Electric’s two children reported this week, the market misunderstood them both, but they came back with a vengeance today,” Cramer said. “I bet GE Aerospace and GE Vernova are ready to race and today’s rallies are important.”

GE Aerospace and GE Vernova did not immediately respond to a request for comment.

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Disclaimer CNBc Investment Club owns shares of GE Vernova.