GE Vernova Stock Gains Premarket After Agreeing To Buy Prolec Stake For $5.3B Before Q3 Earnings

• GE Vernova is set to acquire the remaining stake in the GE Prolec joint venture for $5.3 billion, through a combination of cash and debt.
• The deal will bolster GE Vernova’s fast-growing electrification segment, amid a rapid rise in power demand in the U.S. driven by artificial intelligence data centers.
• The free cash flow from the GE Prolec operations is expected to double to $600 million by 2028.

GE Vernova stock (GEV) gained over 2% in premarket trading on Wednesday after the company agreed to buy the remaining stake in the GE Prolec joint venture from Xignux for $5.3 billion ahead of its third-quarter earnings.

Prolec GE, a major grid equipment maker, manufactures transformers across a wide range of ratings and voltages. The company employs about 10,000 people globally and operates seven manufacturing sites worldwide, five of which are located in the U.S.

The deal, which is proposed to be funded through equal portions of cash and debt, is expected to close by mid-2026.

What’s The Rationale Behind The Deal?

The deal will bolster GE Vernova’s fast-growing electrification segment, amid a rapid rise in power demand in the U.S. driven by artificial intelligence (AI) data centers. U.S. data centers will require 22% more grid power by the end of 2025 than they did one year earlier, and will need nearly three times as much in 2030, according to a report by the S&P Global.

“This acquisition aligns with our strategic and financial objectives and is also good for our customers by strengthening our presence in North America, where demand for grid equipment is growing rapidly,” said CEO Scott Strazik.

The GE Prolec joint venture’s revenue is anticipated to rise to $4.2 billion in 2028 from the $3 billion forecasted for 2025. The free cash flow from the operations is expected to double to $600 million within the same period, the company said.

“The deal is immediately accretive before synergies, with a partner we know well, and will drive additional profitable growth for GE Vernova,” Strazik added.

What Is Retail Thinking?

Retail sentiment on Stocktwits about GE Vernova was in the ‘neutral’ territory at the time of writing.

What Are Wall Street’s Expectations For Its Q3 Earnings?

Last week, Mizuho analysts said that GE Vernova’s lower onshore wind sales and profitability in 2026 are being more than offset by the expansion of the electrification segment, TheFly reported. The brokerage also saw a potential upside revision to GE Vernova's 2025 forecast due to strong bookings for power and electrification.

RBC analysts, however, cautioned that there was limited upside to the stock as the soaring backlog and power demand are now more fully reflected in current valuation and consensus expectations through the end of the decade.

According to Fiscal.ai data, Wall Street expects the company to post adjusted earnings of $1.72 per share, on revenue of $10.86 billion for the quarter ended Sept. 30.

GE Vernova stock has gained nearly 76% this year.

Also See: Western Alliance Bancorp Stock Turns Retail Traders Extremely Bullish After Q3 Print

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