Caterpillar Stock Surges on Power & Energy Demand Growth

Caterpillar (CAT) stock has experienced an impressive surge over the past year, returning 118% against 21.1% for the S&P 500.

This outperformance is not attributed to a turn in the construction cycle, as sales to users rose for a sixth straight quarter.

The significant move can be attributed to the Power & Energy segment, which sells large gensets and turbines, driven by demand growth from data centers.

Sales to users in power generation grew 72% in the second quarter of 2026, with some customers ordering as far ahead as 2030.

The order book has nearly doubled in a year, reaching $72 billion, about 92% above a year earlier, with 59% scheduled for delivery within twelve months.