GE Vernova (NYSE:GEV) experienced a 4.1% decline over the past week, closing at $1,014.75 on Friday. The drop came at the conclusion of a volatile earnings period, even as the company raised its 2026 forecast. Investor attention shifted from robust demand to the timing of cash receipts, a key factor in the stock's pullback.
The company reported second-quarter orders of $24.2 billion, representing 2.18 times revenue, while its backlog swelled to $176 billion, a $13 billion increase from the prior quarter. However, free cash flow for the first half reached $9.897 billion, or 82.5% of the midpoint of the full-year guidance range of $11.5 billion to $12.5 billion. This left approximately $2.1 billion expected in the second half of the year.
The front-loaded nature of cash flow was attributed to a $11.7 billion boost from working-capital inflows, including $13.7 billion from contract liabilities and deferred income, primarily from customer advance payments. While these deposits underscore strong customer loyalty and provide liquidity, they also set a high benchmark for future cash comparisons when reservation payments normalize.
Demand remained robust across key segments. Power orders surged 135% year-over-year to $16.7 billion, with EBITDA margin expanding to 18.8%. Electrification orders rose to $6.3 billion, with a margin of 18.4%. Data center orders surpassed $5 billion in the first half, more than double the total for all of 2025. GE Vernova expects to have at least 125 gigawatts of gas equipment under contract by year-end.
Wind segment performance continued to lag, with orders dropping nearly 40% and an EBITDA loss widening to $275 million from $165 million a year earlier. The company projects wind losses of around $400 million for 2026. Adjusted EBITDA for the quarter came in at $1.25 billion, missing analyst expectations, though the company maintained its full-year EBITDA margin guidance of 12% to 14%.
Shares experienced a turbulent week, falling 8.7% on Wednesday, rebounding 4.7% on Thursday, and slipping another 1.6% on Friday. Despite the weekly decline, the stock is up 55.3% year-to-date. Peer companies Eaton (NYSE:ETN) and Vertiv (NYSE:VRT) outperformed over the last five sessions, highlighting a divergence in power-infrastructure stocks.
Investors will look to key peer earnings in the coming week, with Vertiv reporting on July 29 and Eaton on July 31. These results will help gauge the strength of infrastructure demand. GE Vernova's next earnings webcast is scheduled for October 28.
Risks to the company's outlook include increased wind project expenses, production scaling delays, and tariff impacts, which are expected to be between $100 million and $200 million this year. A slowdown in data center construction could also weigh on new orders. The immediate challenge for GE Vernova is to convert its record backlog into sustainable profit margins and steady cash flow, especially after the surge in first-half deposits.
