Orient Securities has released a research report indicating that the demand for gas turbines in North America continues to be robust. The overseas business of GE Vernova is showing strong order, performance, and profitability trends, with sustained high momentum. Domestically, high-quality Chinese companies like Jereh Group have announced significant orders, clearly benefiting from the spillover demand in North America. The firm is optimistic that the overseas expansion of Chinese gas turbine manufacturers will drive both volume and profit growth for these enterprises.

AI Computing Expansion Creates Power Demand Gap, GE Reports Strong Q2 Results

The acceleration of global data center construction, fueled by computing power expansion, is driving a surge in electricity demand. This is accelerating the need for power grids, electrification, and gas-fired power generation equipment. Against this backdrop, GE Vernova reported a substantial increase in its second-quarter performance. Revenue for the second quarter of 2026 reached $11.1 billion, up 22% year-over-year. Orders totaled $24.2 billion, representing a natural growth of 88%, primarily driven by strong expansion in the power and electrification segments.

Power Business Orders Surge, Gas Turbines Capitalize on AI Boom

GE Vernova's power business orders in the second quarter reached $16.7 billion, a year-over-year surge of 134%. Revenue from this segment increased by 14% to $5.5 billion, and its EBITDA margin improved by 240 basis points (with organic growth of 320 basis points). Orders for gas power equipment and capacity reservation agreements have continued to expand, rising from 100 gigawatts (GW) to 116 GW. The company expects to reach at least 125 GW by the end of 2026. According to GE Vernova, its annual gas turbine production capacity is projected to reach 20 GW in the third quarter of 2026, 24 GW by 2028, and 30 GW by 2030, reflecting management's firm conviction in the strength of medium- to long-term demand.

Gas Power Industry Chain Enters New Boom Cycle, Favorable for Chinese OEMs' Overseas Expansion

As global data center capacity expands, electricity consumption continues to rise, making power supply availability a core bottleneck for computing power growth. Gas-fired power generation, with its stable output and flexible peaking capabilities, is better suited to meet the urgent need for instantly controllable power in large data centers. Recently, Jereh Group signed a contract with a global cloud service provider for the supply of gas turbine generator sets worth $1.465 billion. Over the nine months from November 2025, the company has accumulated related orders totaling 11.681 billion yuan, further confirming the transition of the industrial chain from expectation to performance realization. Core component suppliers are expected to benefit from both the expansion of new unit production and the maintenance needs of existing units, driving a sustained boom cycle across the gas turbine supply chain. Additionally, Orient Securities Company Limited (Orient Securities) previously announced an order for G50 gas turbine business with a Canadian data center. The firm is optimistic about the demand gap created by the acceleration of North American data center construction and even more so about the potential for Chinese gas turbine companies to achieve volume and profit growth by entering the North American market.

Key Risks

Risks include lower-than-expected gas turbine demand in North America and slower-than-expected overseas expansion by Chinese gas turbine manufacturers.