Caterpillar Inc. (CAT) is experiencing significant growth thanks to the surge in demand driven by the artificial intelligence (AI) data center boom. As of the end of Q2 2026, CAT’s order backlog reached a record $72 billion, a 92% increase from the previous year, with 59% expected to be delivered within the next 12 months. The company anticipates that full-year 2026 power generation from reciprocating engines and Solar Turbines will rise as tech firms expand their data center capabilities to support generative AI.
The stock has surged 36% year-to-date, reflecting heightened demand for AI-related power solutions, alongside an increased capital expenditure budget by major players which is set to rise to $750 billion in 2026. Looking forward, CAT expects Q3 sales and revenues to grow compared to the previous year, with an adjusted operating margin projected to improve sequentially from 17.5% in Q3 2025.
Caterpillar has a projected earnings growth rate of 42.4% for the current year, and analysts suggest a short-term price target increase of 29.6% from its last closing price of $779.16, indicating strong market confidence in its performance.
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