Al Root

Shares of power technology provider GE Vernova rose after an old Bull became a new bull on Wall Street.

Wednesday, Guggenheim analyst Joseph Osha upgraded GE Vernova stock to Buy from Hold. He established a price target of $380, about 21% higher than Tuesday's closing level of $313.07.

GE Vernova stock was up 3.1% in premarket trading at $323, while S&P 500 and Dow Jones Industrial Average futures were up about 0.6% and 0.5%, respectively.

Wall Street frequently upgrades and downgrades stocks, but this one is notable for an unusual reason. In January, Osha downgraded GE Vernova shares, saying the "easy money" has been made. His old price target was $380, which was removed with the downgrade to Hold.

At the time of the downgrade, GE Vernova shares were almost $430 apiece, up from about $140 at the time of its April 2 spin from GE Aerospace.

Only a few weeks later, he is a bull again, with the same price target. The Chinese artificial-intelligence app DeepSeek, and the stock market explain why Osha can return to Buy with the old target.

Days after the downgrade, the ChatGPT-like app DeepSeek was released, and it was allegedly developed at a fraction of the cost that OpenAI, Alphabet, and Meta Platforms spend on AI development.

Lower costs raised the specter that maybe the world didn't need all the power-hungry AI data centers to make useful AI. New electricity demand from AI is a big reason that GE Vernova stock was so strong in late 2024 and early 2025.

The DeepSeek debate will continue. And investors will continue to worry about growth and profit margins as President Donald Trump's trade policies take effect. Import tariffs and trade wars can potentially raise costs, complicate supply chains, and lower economic growth. Investors like none of that.

But with GE Vernova stock down more than $100 since late January, it's attractive again. Osha noted in his report that GE Vernova's business continues to perform well. After the downgrade, GE Vernova, Chevron, and investment fund Engine No. 1 announced plans to develop "scalable, reliable power solutions for U.S.-based data centers," using GE Vernova natural gas fired power turbines.

Business is booming, now the stock valuation is more acceptable.

Overall, 73% of analysts covering GE Vernova stock have Buy ratings. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for GE Vernova stock is about $419.

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

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 05, 2025 08:12 ET (13:12 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.