Gas Turbine Prices Set to Surge Amid AI Data Center Boom

Key Points

• AI data centers are being built faster than the power utility industry can add electricity-generating capacity.

• That’s why the artificial intelligence industry is taking power-production matters into its own hands.

• This demand for natural gas power turbines will exceed the supply of them well into the foreseeable future.

AI data centers require on‑site electricity that utility grids cannot reliably provide. Gas turbines, ranging in size from delivery‑truck units to train‑car scale, can generate enough power for a small city or an entire data center, provided they have a natural‑gas supply that is increasingly accessible.

Image source: Getty Images.

Because demand far outpaces supply, prices for natural‑gas power turbines are climbing sharply. Wood Mackenzie projects that by the end of next year, the per‑kilowatt cost of gas turbines could be 195% higher than in 2019.

While this price surge challenges data‑center operators, it creates opportunities for manufacturers that can meet the growing demand. The following companies are positioned to benefit:

Stocks being driven higher by insatiable demand for natural gas power turbines

These firms are leading beneficiaries, with expanding order backlogs that could sustain growth for several years.

GE Vernova

GE Vernova (NYSE: GEV) relies heavily on its gas‑turbine segment for current profits. The latest quarter saw 12% organic revenue growth, with the power division up 14%, led by turbine sales. Orders in this segment jumped 134% year‑over‑year, expanding the backlog to $13 billion and pushing total backlog to $176 billion—over four years of current annualized sales.

Siemens Energy

Siemens Energy (OTC: SMERY, OTC: SMEGF) recorded an 18.5% year‑over‑year revenue increase driven by AI‑center demand. It shipped 6 gigawatts of gas turbines in the quarter but secured 15 gigawatts of new orders, raising its backlog to 69 gigawatts.

Mitsubishi Heavy Industries

Mitsubishi Heavy Industries (OTC: MHVYF) posted 13.3% revenue growth in its most recent quarter, with capacity additions aimed at meeting rising turbine demand.

Honorable mentions

Additional companies with exposure to the gas‑turbine market include:

Caterpillar

Caterpillar (NYSE: CAT), best known for construction equipment, also provides diesel‑powered generators used in AI data centers. Microsoft’s planned Monarch Compute Campus in West Virginia will initially use Caterpillar’s G3500-series natural‑gas generators, with a long‑term plan for two gigawatts of turbines from its Solar Turbines subsidiary. Data‑center demand contributed significantly to Caterpillar’s 24% year‑over‑year sales growth.

Woodward

Woodward (NASDAQ: WWD) serves the on‑site power market and stands to gain from the turbine price surge. While its disclosures are less transparent than peers, it remains a potential watchlist candidate.

Investment considerations

Investors seeking exposure to the surging gas‑turbine market may view GE Vernova as a strategic opportunity, given its substantial order backlog and ongoing capacity expansions that align with AI‑driven demand.

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