GE Vernova GEV and American Electric Power AEP share a strong strategic connection through their focus on transmission infrastructure and large-scale grid expansion. As electricity demand rises, particularly driven by energy-intensive sectors like AI and data centers, the ability to move power efficiently across regions has become increasingly critical. Both companies are positioned to benefit from this structural shift, albeit from different sides of the value chain.
Utilities are no longer just power providers; they are becoming central players in enabling a cleaner, more resilient and technology-driven energy ecosystem. Companies that can efficiently scale renewable generation, integrate storage solutions and modernize transmission infrastructure are likely to capture significant long-term value, making them increasingly attractive from an investment standpoint.
GE Vernova contributes through its technology and equipment, supplying advanced grid solutions such as high-voltage transmission systems, grid automation and electrification technologies. These capabilities are essential for modernizing aging infrastructure and integrating renewable energy sources into the grid. Conversely, American Electric Power operates one of the largest transmission networks in the United States, actively investing in expanding and upgrading its grid to accommodate growing demand and ensure reliability.
Let us compare the stocks' fundamentals to determine which one is a better investment option at present.
Factors Acting in Favor of GEV Stock
GE Vernova is a pure-play energy company with a dedicated focus on grid modernization, renewable power and decarbonization technologies. Rapid growth of data centers and the accelerating adoption of artificial intelligence are driving a sharp rise in electricity demand. This trend is creating wider growth opportunities for GE Vernova across its gas turbine business, grid solutions and broader power infrastructure, as governments and companies invest in more resilient and scalable energy systems to support increasing power consumption.
In March 2026, GE Vernova secured an IVPC Group contract for a more than 100-megawatt (MW) Fortore Wind Farm in Italy. The company will provide 17 of its advanced onshore wind turbines and deliver customized operations and maintenance support, creating upfront project revenues and recurring service income.
Factors Acting in Favor of AEP Stock
American Electric Power’s geographically diversified operations allow it to gain from revenues generated from different states compared with its single-state utility peers. The company owns the nation's largest electricity transmission system, comprising 38,000 circuit miles of transmission lines, including approximately 2,000 circuit miles of 765 kV lines, which serve as the backbone of the electric interconnection grid in the eastern United States.
AEP recognizes commercial load, particularly from energy-intensive sectors like AI-driven data centers, as a significant factor in its retail load growth. By 2030, AEP expects its peak electricity demand to reach about 56 GW. These additions are secured through Electric Service Agreements and Letters of Agreement, which are firm commitments from large customers, such as data centers or industrial users.
How Do Zacks Estimates Compare for GEV & AEP?
The Zacks Consensus Estimate for GE Vernova’s 2026 and 2027 earnings per share (EPS) indicates year-over-year increases of 25.38% and 5.18%, respectively. GEV’s long-term (three to five years) earnings growth rate is 18%.
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The Zacks Consensus Estimate for American Electric Power’s 2026 and 2027 EPS indicates year-over-year rallies of 6.2% and 7.87%, respectively. AEP’s long-term earnings growth rate is 6.72%.
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Valuation for GEV & AEP
GEV shares trade at a forward 12-month price/sales (P/S F12M) of 6.55X compared with AEP’s P/S F12M of 3.09X.
GEV & AEP’s Return on Equity (ROE)
ROE measures how efficiently a company is utilizing its shareholders’ funds to generate profits. GE Vernova’s current ROE is 43.97% compared with American Electric Power’s 10.46%.
GEV & AEP’s Price Performance
In the past three months, shares of GE Vernova and American Electric Power have risen 65.9% and 12.8%, respectively.
GEV or AEP: Which Is a Better Choice Now?
Both GE Vernova and American Electric Power’s commonality lies in enabling the backbone of the energy transition: a more robust, flexible and expansive grid. As AI workloads and hyperscale data centers continue to proliferate, the need for stable and scalable electricity delivery will only intensify. This makes both companies key beneficiaries of long-term capital expenditure cycles tied to grid modernization and transmission buildout.
Our choice at the moment is GE Vernova, given its better earnings growth projection, stronger ROE and better price performance than American Electric Power. Both GEV and AEP stocks carry a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
