CAT Surges on Record Revenue and Prolonged Order Visibility

Caterpillar (CAT) has emerged as one of the most direct beneficiaries of the AI data center buildout, and its stock price is starting to reflect this trend. In Q2 2026, CAT reported a record $20.54 billion in revenue, surpassing the $20 billion mark for the first time in a single quarter.

The company's operating margin expanded to 20.9%, while net income jumped 64.89% year over year. The backlog grew sequentially by $9 billion to $72 billion, up roughly 92% year over year, with some Power & Energy customers placing orders as far out as 2030.

The bull case for CAT is based on the growth of its Power Generation product line, which increased 72% in Q2 due to data center demand. The company is also bringing back 1.5 gigawatts of 10-megawatt gas reciprocating engine capacity, with first shipments expected in Q4.

CAT's $868 price target suggests that the current share price of $822.48 is undervalued by 5.52%. Our analysts rate CAT a buy with high confidence at 90%, citing momentum in Power Generation and visibility into future orders as far out as 2030.