Caterpillar Stock Surges 74%, But Is Demand Still Strong?

Caterpillar stock experienced an impressive run of 74% in the twelve months to September 23, 2026, outperforming the S&P 500's return of 16.5%. A $10,000 investment at the start would have been worth approximately $17,350 by the end of this period.

However, what might have gone unnoticed was that Caterpillar's own sales were still declining during this time. To identify when demand began to turn around, investors would need a clear indication that customers were buying more equipment.

A closer look at the data reveals that dealers' sales to users showed signs of improvement before Caterpillar's revenue did. In the third quarter of 2024, management reported a 6% decline in sales to users, but by April 30, 2025, they noted that their merchandising programs were yielding results.

The August 5, 2025 call highlighted that end buyers were beating Caterpillar's expectations, with sales to users growing above projections. Filed revenue figures also pointed to a recovery, with the decline narrowing from 9.8% in March 2025 to 0.7% in June 2025.

The power side of the business was harder to see, but early signs indicated a trend towards growth. By August 4, 2026, Caterpillar's backlog had reached $72 billion, with Power & Energy sales to users growing 33% in the second quarter of 2026 and 22% in Construction Industries.

Investors are now paying 34.5 times Caterpillar's last twelve months of earnings, which is higher than the S&P 500's price-to-earnings ratio of 22.4. As shares have pulled back since the summer, tracking end demand continues to be a critical factor for investors.