Caterpillar's Stock Surge Tied to Shift in Demand Drivers

Caterpillar's stock has surged about 91% over the past year, but the demand drivers behind this growth have changed significantly since two years ago. Management initially credited merchandising programs for the construction business's success, but these programs are no longer the top explanation.

Today, rental fleet loading is a bigger piece of the segment's growth, with machines bought by dealers to stock their own rental fleets counted as sales to users. Major Projects, a Cat dealer-owned rental joint venture that started taking units in June 2026, will serve large-scale infrastructure, energy, and data center builds.

The construction industry still accounts for about 34% of Caterpillar's revenue, with its trailing-twelve-month turnover reaching $25.1 billion. However, the underlying growth drivers have shifted significantly over the past two years.