Caterpillar's $72B Backlog: Can Data Center Demand Hold Up?

Caterpillar's Power & Energy segment is facing a significant backlog, with customers ordering as far out as 2030. The company is adding capacity to meet demand, including restarting production of its 10-megawatt gas engine, which will add about 1.5 gigawatts of capacity to the segment.

The restart is expected to begin in the fourth quarter of 2026, and if shipments proceed on schedule, it could indicate effective backlog conversion. However, there are still concerns about whether data center demand will hold up in later years, with some analysts questioning the sustainability of current trends.

Caterpillar's backlog reached $72 billion in Q2 FY2026, up 92% from a year earlier, and the company's own figures show strong demand for large generator sets and turbines used in data centers. However, management has not broken down how much of the backlog came from large awards versus broad demand.