Caterpillar's AI-Fueled Growth Could Push Stock to $1,000
Caterpillar, maker of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives, has seen its stock price trade above $800. The company's energy and transportation division is a key supplier of primary and backup power for AI facilities, specifically its reciprocating industrial engines and solar turbines.
Caterpillar is tripling its production capacity of large reciprocating engines relative to its 2024 baseline, as hyperscalers sign multi-gigawatt power contracts. This move will secure long-duration, high-margin equipment backlogs for the company.
In the second quarter, Caterpillar reported record revenue of $20.5 billion, up 24% year over year. Its operating profit margin grew from 17.3% in the prior-year quarter to 20.9%, and earnings per share rose 68% to $7.77.