GE Vernova (GEV) and Bloom Energy's (BE) sharp selloff as the market reacted to DeepSeek's model breakthrough is overblown and offers a buying opportunity, Morgan Stanley said in a note on Wednesday.
The firm said that DeepSeek launched models with efficiency comparable to OpenAI's at a lower cost leading to concerns about reduced AI-related power demand, but it will accelerate adoption as computing costs fall and geopolitical factors may limit US impact.
Infrastructure investments will continue including, GE Vernova advancing natural gas power projects with Chevron (CVX) and NextEra Energy (NEE) and Bloom Energy's 1,000 megawatt fuel cell deal with American Electric Power (AEP), Morgan Stanley added.
Power demand growth extends beyond AI and GE Vernova is seeing record gas turbine and grid equipment demand driven by global electrification, coal plant replacements, and infrastructure upgrades, while broad power shortages are increasing fuel cell demand, the firm added.
Morgan Stanley raised its price target on GE Vernova's stock to $400 from $367. The firm has an overweight rating on GE Vernova and Bloom Energy.
Price: 355.00, Change: -0.13, Percent Change: -0.04
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