Is GE Vernova Inc. (GEV) the Best Young Stock to Buy According to Hedge Funds?

Yahoo

15-05-2025

We recently published a list of the 11 Best Young Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where GE Vernova Inc. (NYSE:GEV) stands against other best young stocks.
NASDAQ CEO and chair Adena Friedman appeared on CNBC's 'Squawk Box' on April 24 to discuss what to make of the market volatility, as well as the IPO landscape. Friedman reported that NASDAQ achieved 12.5% overall revenue growth in the quarter, with every division posting double-digit increases. Specifically, the index business grew by 26%, which was supported by $27 billion of inflows during the quarter. Half of these inflows were directed into NASDAQ 100 index products, while the other half went into various other indexes offered by NASDAQ. Friedman also acknowledged that the economy entered the year with resilience but faced increasing uncertainty and volatility as the quarter progressed. However, she explained that such environments often drive clients to turn to NASDAQ as the market operator of choice to manage their trading volumes and capital flows. She noted that even amid market value fluctuations, NASDAQ saw inflows into its index products and strong demand for its fintech services.
The discussion also indicated that while short-term market volatility can boost trading activity and liquidity, longer-term IPO prospects depend on broader economic conditions. Friedman said that IPO activity and investor behavior could change more significantly if the economy were to enter an extended recession. But for now, NASDAQ benefits from a strong start to the year and remains a preferred venue for investors to express their views. The conversation then turned to global capital flows, particularly as Chinese sovereign wealth funds may reduce investments in US venture capital and private equity firms. Friedman stated that the capital flows where returns are the strongest. She emphasized that asset owners and managers have 'fiduciary' responsibilities to their ultimate beneficiaries and will prioritize returns over the long term. Acknowledging the influence of geopolitical and political factors on investment decisions, Friedman stressed that NASDAQ's role is to provide the infrastructure that allows capital to flow efficiently regardless of shifts.
We first used the Finviz stock screener to compile a list of young stocks that went public in the last 3 years. We then selected the 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An aerial view of a power plant, symbolizing the company's investments in energy infrastructure sector.
Number of Hedge Fund Holders: 111
GE Vernova Inc. (NYSE:GEV) is an energy company that provides various products and services that generate, transfer, orchestrate, convert, and store electricity in the US, Europe, Asia, the Americas, the Middle East, and Africa. The company operates through three segments: Power, Wind, and Electrification.
Barclays analyst Julian Mitchell maintained a Buy rating on GE Vernova on April 29 and set a $427 price target. In Q1 2025, GE Vernova's Gas Power segment saw equipment orders increase by over 30%, with 29 heavy-duty gas turbines booked, which is ~2x the previous year. The total gas turbine backlog has grown to 29 gigawatts and is supplemented by 21 gigawatts in slot reservation agreements expected to convert to orders.
GE Vernova Inc. (NYSE:GEV) currently has 50 gigawatts of gas turbines under contract or reserved and anticipates shipping more than 10 gigawatts in the remainder of 2025, with the aim to end the year with over 60 gigawatts in backlog and reservations. The long-term outlook for gas power remains strong, with 2026 and 2027 largely sold out and commercial activity accelerating for deliveries in 2029 and 2030.
Artisan Global Opportunities Fund stated the following regarding GE Vernova Inc. (NYSE:GEV) in its Q4 2024 investor letter:
'Notable adds in the quarter included GE Vernova Inc. (NYSE:GEV) and Oracle. GE Vernova is the power, wind and electrification spinoff from the former GE conglomerate. The company benefits from large global market shares across its businesses, high barriers to entry and a substantial installed base that generates multiyear service revenue streams. Now that the company is standing on its own, we believe it is in the early innings of a turnaround story while benefiting from an attractive underlying demand environment. As the world continues to decarbonize, the resulting need for power, wind and electrification equipment is poised to drive attractive growth over the coming years. Our work on AI data center growth and electrification implications strengthened our conviction in GE Vernova in the quarter, particularly its natural gas business, which we believe will need to act as a bridge fuel as technology companies try to balance AI data center growth with decarbonization targets.'
Overall, GEV ranks 1st on our list of the best young stocks to buy according to hedge funds. While we acknowledge the growth potential of GEV, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than GEV but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.