Caterpillar IncCaterpillar's revenue and backlog surged due to demand for AI infrastructure, including data centers and power systems.

Caterpillar's stock has risen 330% over the past five years, driven by its role in building data centers and providing power systems for artificial intelligence infrastructure. In the first quarter of 2026, revenues increased 22% and adjusted earnings rose 30%, while the company's backlog reached a record $63 billion, up 79% from a year earlier. However, the stock now trades at a price-to-sales ratio of 6x, more than double its five-year average of 2.6x, and a price-to-earnings ratio of 45x, also more than double its five-year average of 19x. The dividend yield has fallen to 0.7%, below the S&P 500's 1%. Analysts caution that the valuation may be stretched, suggesting the stock is best suited for aggressive growth investors who believe the AI trend has a long runway.
Caterpillar IncCaterpillar's revenue and backlog surged due to demand for AI infrastructure, including data centers and power systems.