Caterpillar's Production Capacity Key to Unlocking Stock Potential
Caterpillar's stock has declined 6.5% over the past three months despite clearing $20 billion in sales for the first time in its history in the second quarter of 2026.
The company's backlog was a record $63 billion when it reported the first quarter of 2026 and $72 billion by the second, with lead times on gas engines for prime power running into the back half of 2028 and 2029, and turbines a little longer.
Caterpillar is restarting a 10-megawatt medium-speed gas reciprocating engine platform it stopped building in 2022, bringing about 1.5 gigawatts of production capacity back online with minimal investment, and has also converted a 250,000-square-foot work-tool factory in Wamego, Kansas.
The growth is narrow, however, coming primarily from power generation sales to end users, which grew 72% in the second quarter of 2026 on demand for large gensets and turbines going into data centers.