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AI Drives Energy Giant's Explosive Growth
11 Dec
Summary
- Company's equipment generates over half of US daily electricity.
- AI demand could triple backlog contribution in three years.
- Company projects EBITDA margins to grow from 8.5% to 20% by 2028.
A significant player in the energy sector, whose equipment generates over half of the daily electricity in the United States, is experiencing substantial growth. While artificial intelligence is a key driver, comprising 10% of the current backlog and projected to reach approximately a third within three years, it represents only one facet of increasing demand.
Other crucial factors fueling this expansion include the electrification of buildings and transportation, alongside a broader re-industrialization trend both within the US and internationally. Even within gas turbines, a sector where AI is a more concentrated driver at about a third of future business, large contracts have recently been secured in Vietnam, Mexico, Saudi Arabia, and Taiwan.
The company remains confident in its strategic direction, projecting a significant increase in EBITDA margins from 8.5% in the current year to 20% by 2028. This optimistic outlook is bolstered by demonstrable productivity gains from AI investments and a belief that current demand projections may even be conservative when viewed against the broader economic impact of AI on global labor and services.
