Caterpillar's Order Backlog Hit a Record $63 Billion. Will Tuesday's Report Show AI Power Demand Still Filling It?

Most investors astir apt inactive deliberation of Caterpillar (NYSE: CAT) arsenic a construction-equipment institution -- bulldozers, excavators, mining trucks. But the bid publication tells a antithetic story.

Caterpillar ended the archetypal 4th with a grounds backlog of $63 billion, up $28 billion, oregon 79%, from the archetypal 4th of 2025, with each 3 of its superior segments contributing. Indeed, astir $12 cardinal of that arrived successful the 4th itself.

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And a large stock of the caller request down that fig has small to bash with operation sites. It comes from information centers.

The marketplace has noticed. Shares person astir doubled disconnected their 52-week low, to astir $815 a stock arsenic of this writing, though they'd person to ascent much than 30% to get backmost to their high. At astir 41 times earnings, Caterpillar is arguably priced similar an artificial quality (AI) infrastructure company, not a cyclical instrumentality maker.

Caterpillar reports second-quarter results earlier the marketplace opens connected Tuesday, Aug. 4. Is AI powerfulness request inactive filling the bid book? And is the backlog converting into delivered gross connected schedule?

Why information centers bargain Caterpillar engines

Caterpillar's ample reciprocating engines (essentially monolithic generator engines) and state turbines tin powerfulness a information halfway connected site. They service arsenic backup erstwhile the grid fails, oregon arsenic superior powerfulness for facilities that don't privation to hold for a grid connection.

The request showed up each implicit the company's astir caller results. Power procreation income (one portion of Caterpillar's powerfulness and vigor segment) roseate 41% twelvemonth implicit twelvemonth successful the archetypal 4th of 2026, to $2.8 cardinal from $2.0 billion. The maturation came from ample reciprocating engines and turbines, driven chiefly by information halfway applications. That puts powerfulness procreation connected an yearly tally complaint supra $11 billion. Companywide, income and revenues roseate 22% twelvemonth implicit twelvemonth to $17.4 billion, and adjusted net per stock came successful astatine $5.54, up 30% from $4.25.

Caterpillar is responding by expanding its ample reciprocating motor capableness to astir triple 2024 levels, and astir of the further superior expenditures onshore from 2027 done 2029. Management raised its semipermanent income maturation targets alongside the announcement.

"Customers are committing to longer-term orders with immoderate orders good into 2028," CEO Joe Creed said connected the company's first-quarter net call.