Demand for GE Vernova's power generation equipment amid the AI data center building boom has sent shares to levels no one expected.

Now, how the stock reacts to earnings on Wednesday can help tell investors if the AI trade is alive and well, or if more pain is coming to many stocks, beyond shares of Vernova.

The company is set to report second-quarter numbers on Wednesday morning. It's an important report for Vernova, with shares above $1,000, up roughly 700% since the company was spun out of GE Aerospace in 2024.

Few can credibly claim to have seen those gains coming. The average analyst price target for GE Vernova shares was about $180, shortly after the spin. Now, it's about $1,130.

AI has helped. Rising demand for electricity has filled GE Vernova's manufacturing plants, improved pricing, and built out its backlog. The company has become a useful bellwether for investors looking into the health of the AI trade.

For starters, investors would like to see a beat-and-raise quarter. Wall Street is looking for earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $1.3 billion, from sales of $10.8 billion. A year ago, GE Vernova reported Ebitda of about $800 million from sales of $9.1 billion.

Orders should exceed sales. First quarter orders totaled $18.3 billion, up 71% year over year and almost double sales. (GE Vernova stock rose 13.7% after reporting first-quarter numbers.)

Exactly how good things need to be with Q2 numbers to squash concerns about AI problems is anyone's guess. Instead of trying to predict what has to happen, just watch the reaction, says Travis Prentice, chief investor officer at Informed Momentum Company.

He, as the firm's name suggests, is a momentum investor, using stock price and fundamental signals, such as earnings growth and earnings estimate revisions, to help identify winning stocks.

Prentice suggests comparing GE Vernova's stock on Thursday evening, a couple of trading sessions after results are released, to prices on Tuesday. That offers investors useful information about stock and market sentiment.

"Once you see something happen, see the reaction in the market... then make your decision," says Prentice. "That has a much higher probability of working in your favor than prediction."

Up relative to the market, of course, is good. Down signals that investors are worried about AI, which could have implications for countless stocks, including semiconductors, utilities, industrials, and technology shares.

Everything is AI these days, which is why everyone needs to pay attention to GE Vernova earnings.

Coming into the week, GE Vernova stock was up about 62% year to date and up about 84% over the past 12 months. Shares were also down about 11% from a 52-week high of almost $1,200 per share.

Write to Al Root at allen.root@dowjones.com

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July 21, 2026 14:00 ET (18:00 GMT)

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