Energy giant Chevron (CVX) is teaming up with investor Engine No. 1 and energy equipment maker GE Vernova (GEV) to build natural gas-fired power plants next to data centers. This partnership will look to capitalize on the surging demand for electricity driven by artificial intelligence. The companies plan to have their first multi-gigawatt plant up and running by the end of President Donald Trump’s term in order to provide power directly to a nearby data center.
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The demand for electricity in the U.S. is projected to increase by almost 16% over the next five years, thanks to data centers and the electrification of the economy. However, Chinese AI company DeepSeek’s more efficient model has thrown these forecasts into doubt, which caused power stocks to plunge. Nevertheless, gas plants are seen as a competitive solution for powering data centers due to their lower costs and faster construction times compared to nuclear power and renewables.
Chevron and its partners plan to build power plants with enough capacity to produce up to four gigawatts of power by the end of 2027. To give an idea of how much energy that is, four gigawatts could power about 3.5 million U.S. homes. These plants will be built beside data centers in the U.S. Southeast, West, and Midwest, using GE Vernova gas turbines.
Which Energy Stock Is the Better Buy?
Turning to Wall Street, out of the two stocks mentioned above, analysts think that GEV stock has more room to run than CVX. In fact, GEV’s price target of $432.67 per share implies almost 25% upside versus CVXs 13%.
