Caterpillar Stock Surges 12% on Strong Earnings Driven by AI Data Center Boom

Caterpillar's stock surged by 12% in morning trading after the company reported better-than-expected second-quarter profits. The equipment giant's revenue growth was driven by a buildout of AI data centers, which has led to increased demand for power-generation and construction equipment.

The company raised its annual revenue growth forecast and cut its full-year tariff costs forecast to $2.2 billion from the previously expected $2.2 billion to $2.6 billion. Caterpillar's core construction segment saw a 35% increase in revenue, with strong retail sales in North America contributing to the growth.

The power and energy arm also posted a 17% growth in revenue, accounting for a combined 81% of Caterpillar's total revenue. The company builds power generators and backup power equipment under its power & energy segment, while its construction industries segment manufactures excavators and bulldozers.