The stage is set for a showdown between two of GE’s high-profile spin-offs, GE Vernova Inc (GEV) and GE Healthcare Technologies Inc (GEHC), as they prepare to reveal their third-quarter earnings. While both companies are making strides in their respective industries, one seems to be better positioned for the AI-powered future, a trend that’s rapidly reshaping the global landscape.
GE Vernova: Powering Growth with AI
GE Vernova, the electric power division of GE, is poised to electrify investors as it reports earnings. Wall Street analysts are optimistic, expecting an EPS of 38 cents and revenue of $8.8 billion. The bullish outlook is fueled by Vernova’s strategic investments in power infrastructure, the electrification of industries, and the burgeoning demand for AI data centers. Despite some headwinds in the wind energy sector, Vernova has seen a significant year-to-date surge of 110.61%. Deutsche Bank, recognizing Vernova’s dominant position in power generation and its ability to modernize grids for the AI era, has set a lofty $354 price target. Analysts are touting Vernova as the ‘supermarket’ for electric power, emphasizing its global reach and growing demand for heavy-duty gas turbines. This makes it a favorite pick ahead of earnings.
Technical Outlook: Bullish Signals
GE Vernova’s technical indicators are also painting a positive picture. Trading at $276.43, the stock is comfortably above its eight, 20, and 50-day moving averages, signaling continued bullish momentum. Analysts anticipate CEO Scott Strazik to double down on the growing AI-powered data center market and industrial electrification during the earnings call, further solidifying Vernova’s role as an AI-driven power play.
GE Healthcare: Catching Up in the AI Race
On the other hand, GE Healthcare has lagged behind Vernova in 2024, with a year-to-date gain of only 17.59%. However, the company is not standing still. With a third-quarter earnings date set for Oct. 30, expectations are tempered at $1.06 EPS and $4.9 billion in revenue. While GEHC has faced challenges, including slow Chinese orders and high financing costs, analysts see potential for recovery, especially with its recent AI breakthroughs.
GE Healthcare’s push into AI tools like CareIntellect and Versana Premier could offer long-term gains by streamlining healthcare data and enhancing diagnostic accuracy. Despite its recent softer performance, GE Healthcare continues to innovate, having recently launched AI tools designed to improve cancer treatment and fetal health monitoring.
Technical Outlook: Cautious Signals
However, the stock is currently trading at $89.80, and technical indicators are showing selling pressure. Investors may need to wait before this stock regains its AI groove.
The Verdict: Vernova Takes the Lead
While GE Healthcare is making significant investments in AI for medical advancements, GE Vernova’s position in the booming electric power market, fueled by AI-driven data centers, puts it in a stronger position heading into the third quarter. With momentum on its side and bullish technical signals flashing, GE Vernova is the GE spinoff to watch.
The third-quarter earnings reports will provide a clearer picture of each company’s performance and future trajectory. Investors are eager to see how these two GE spin-offs are navigating the ever-evolving AI landscape and which one will emerge as the true AI champion.