Caterpillar Stock Soars on Data Center Demand and Record Backlog

Caterpillar (NYSE:CAT) shares have surged by an impressive 118.16% over the last 12 months, driven by a data center capex boom, record backlog, and margin expansion.

The company's Q2 2026 report on August 4 was a catalyst for this growth, with revenue exceeding expectations at $20.54 billion, up 24% year over year. This marked the first time Caterpillar achieved a $20 billion quarter in its history.

CEO Joe Creed stated that 'no one is slowing down at the moment,' and with turbine capacity being scaled to 2.5x 2024 levels, lead times are extending into 2028 and 2029. PineBridge forecasts roughly 25% annual growth in data center equipment as effectively locked in.

Our price target for Caterpillar is $1,026.19, implying a 16.39% upside from the current price of $881.65. We rate CAT a buy with high confidence, although there are some risks to consider, such as full-year tariff costs of roughly $2.2 billion and potential softening in end-user demand.