We’re buying this AI infrastructure stock well below its recent high
We are buying 10 shares of GE Vernova at roughly $1,009. Following the trade, Jim Cramer’s Charitable Trust will own 90 shares of GE Vernova, increasing its weighting in the portfolio to about 2.3% from about 2%. Shares of power and electrification company GE Vernova are pulling back roughly 6% on Tuesday alongside the rest of the AI infrastructure trade. We do not believe the sell-off in the group reflects any change in fundamentals, but rather reflects technical pressure on momentum stocks as oil prices and bond yields climb. We aren’t ignoring potential signals from the bond market, but broadly speaking we view these types of downturns as opportunities to scale into high-quality companies with strong multi-year outlooks. We’re buying GE Vernova 14% below its all-time high close of $1,174 on June 30. GE Vernova is at the center of the data center buildout thanks to its sold-out heavy-duty gas turbines, which turn natural gas into electricity, and its electrification solutions that connect data centers to the grid. The stock sold off to about $985 last month after an earnings miss , but what mattered to our thesis was that gas turbine pricing continued to trend higher, the total backlog increased sequentially, and electrification orders were 1.7x revenue. The combination of these three factors suggests continued revenue and earnings growth for the foreseeable future. (Jim Cramer’s Charitable Trust is long GEV. See here for a full list of the stocks.) As a subscriber 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 trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
