GE Vernova, Siemens Notes
Plus a Starter Position
Today’s article will provide a brief overview of the state of the natural gas turbine industry. Is it really all about AI? Is there more than that driving demand?
Before we dive in: This is not investment advice. Please do your own research. And if you would like to comment, please be respectful to capybaras; they deserve it.
GE Vernova
Nov/25 WSJ Podcast
In Nov 2025, the CEO of GE Vernova (GEV), Scott Strazik, attended the Wall Street Journal Podcast to discuss GE Vernova’s transformation since its spin-off from General Electric in April 2024. He mentioned a few important points regarding the growth in electricity demanded and GEV’s industry positioning, especially in natural gas.
Power density and flexibility: natural gas is capable of generating significant energy in a small amount of space. It can also scale up and down depending on load. Compare this to renewable power that takes 9x the installed capacity and 10x the investment level
Global energy mix: 20% in electricity, the rest is from coal, fuels, etc. Electricity as a percentage of the energy mix is expected to increase, driven by electric vehicles, industrial electrification, heat pumps, and data centers
US electricity demanded: from the 1945-1975 post-war period, the US power system capacity doubled every 10 years. It took another 35 years, beginning in 1975, to double again. Since the 2000s, US electricity demanded has been flat. This is due to 1) Offshoring of US manufacturing, 2) Energy efficiency (fridge, microwave), and 3) Software and the internet driving productivity, reducing the need for power. Power demand growth is now coming back, driven by the reshoring of factories and AI
Bottleneck: equipment, EPC expertise, permitting, land constraints, labor
How is GEV positioned to benefit
Installed base: GEV powers 50% of US electrons and 1/3 of global electrons (ex-China) across gas, nuclear, wind, and the grid. I estimate the company’s natural gas turbine installed base is around 920GW as of Q3/25
Backlog: sold out between now and 2028. Incremental capacity would come later than 2028
Only AI? AI and hyperscalers only comprise 10% of backlog (confirmed orders) and 33% of slot reservations (not yet orders, but substantial down payments to secure the slot)
Other demand sources: utilities adding reserve margins (additional capacity to meet peak grid load), TSMC in Taiwan, Saudi Arabia’s oil-to-gas transition, India’s coal-to-gas transition (80% of electricity coming from coal)
Dec/25 Investor Day
In Dec 2025, GEV hosted an Investor Day. A few key points:
Utility capital expenditures surpassed oil and gas for the first time
Hyperscalers are directly contacting GEV, which is unheard of
Demand for gas turbines is at an all-time high
New contracts: 18GW quarter-to-date, after 8GW in Q1, 9GW in Q2, and 12GW in Q3
Orderbook: 80GW, 50/50 split between backlog and slot reservation (up from 50GW in Q1). 2030 capacity to be sold out by 2026
Capacity: 20GW by Q3/26, working on adding 4GW. 4-year backlog
Siemens Energy
Dec/25 Special Call
On Dec 18, 2025, Siemens Energy hosted a “Pre-Close Group Call” to remind investors of prior guidance, recap, roadshows, and their recent capital markets day, one day before their silent period begins on Dec 19, 2025.
Electrification: 50% global electricity demand growth in the next 10 years, doubling by 2050, driven by electrification (transportation, industrials), population growth, and AI/data centers
Gas turbine: 90-100GW per year for the next 10 years, driven by coal-to-gas conversions, grid stability, and industrialization
Company metrics
Orderbook: 78GW in backlog and slot reservations, 36GW to be converted to orders in the next 12 months
Data centers: 20-25% of overall order intake
Capacity: 25GW by 2027, 30GW by 2030. Maintain 25-30% market share
Installed base: 700GW
What does this mean for investors? Although it might not be a bad idea to invest in GEV and Siemens, they are both trading at valuations that I consider to be fairly valued. What about companies that sell to them?
Himile Mechanical Science and Technology (002595.SH)
#1 (52% of revenue): Tire molds to motorcycles, aircraft, passenger cars, and commercial vehicles
Revenue grew 19% for 1H25, driven by rapid growth in new energy vehicles production and stable tire replacement demand. China’s domestic EV market is slowing down. Future growth will come from exports and Chinese brands setting up factories and producing overseas. Himile controls 30% of the global tire mold market
#2 (37% of revenue): Casting and precision machining of natural gas and wind turbine parts (GEV, Mitsubishi, Siemens, Dongfang Electric, Shanghai Electric, and Harbin Electric are all customers)
Revenue grew 33% for 1H25, driven by the surge in gas demand as mentioned above. Global wind turbine installation is expected to grow 18% in 2025
Goldwind: the largest wind turbine manufacturer in the world. Revenue grew 25% in Q3/25 and 34% YTD 2025.
#3 (10% of revenue): Machine tools for metal cutting in auto production, semiconductors
Revenue grew 145% for 1H25, supported by the Chinese government’s equipment renewal policy and the upgrade of the manufacturing industry
24x EV/EBIT for a company growing revenue and EBIT by 27%, not the cheapest company, but good industry tailwinds.
Starter position for now! More research and monitoring to come
I’m also interested in Yantai Jereh Oilfield Services (002353.SH), but they are more focused on oil and gas equipment. They recently announced natural gas turbine partnerships with Siemens, Baker Hughes, and Kawasaki Heavy Industries. Seems more cyclical than Himile though.
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