Mar Vista cites AI spending fears in GE Vernova quarterly loss

Mar Vista Investment Partners, LLC attributed the 19.10% decline in GE Vernova Inc. (NYSE: GEV) shares during the third quarter of 2026 to broad concerns regarding artificial intelligence and data center spending, a sentiment shift the firm argues does not reflect a deterioration in the energy company's underlying business. The investment management company detailed this assessment in its "Mar Vista U.S. Quality Premier Strategy" third-quarter 2026 investor letter, noting that while macroeconomic headwinds including rising interest rates and inflation weighed on equities, AI enthusiasm supported index leaders. The strategy itself returned 1.74% net for the period, underperforming the S&P 500's 2.30% gain as industrial stocks detracted from performance.

GE Vernova, a provider of products and services that generate, transfer, and store electricity, closed at $999.35 per share on October 8, 2026, valuing the company at a market capitalization of $265.56 billion. Despite the quarterly drop, the stock remained positive over the longer term, posting a one-month return of 4.40% and a 52-week gain of 65.30%. Mar Vista's commentary highlighted that demand across GE Vernova's Power and Electrification segments remains strong, with continued growth in its order backlog. The letter states that management expects this backlog to reach approximately $200 billion in early 2027, up from $176 billion at the end of the second quarter.

The firm noted that GE Vernova is largely sold out through 2030, with new gas turbine slots being sold at materially higher prices, a trend Mar Vista believes supports continued margin expansion. This pricing power and secured future revenue were cited as key factors distinguishing the stock's fundamental strength from the transient sentiment surrounding AI investment cycles. Mar Vista concluded that the price weakness primarily reflected shifting investor sentiment around the AI and data center investment cycle rather than any significant change in GE Vernova's operational outlook.

Hedge fund positioning data suggests a cooling in institutional interest for the stock. According to Insider Monkey's database, 106 hedge fund portfolios held GE Vernova at the end of the second quarter, a decrease from 118 portfolios in the previous quarter. The stock ranks 29th on a list of the 40 most popular stocks among hedge funds heading into 2026. Mar Vista indicated it remains cautious moving into the fourth quarter, focusing on valuation discipline amid ongoing macro headwinds and what it describes as unproven AI capital efficiency. The firm also noted that while it acknowledges GE Vernova's potential, it believes certain other AI stocks offer greater upside with less downside risk.