Caterpillar Lifts 2026 Sales Growth Forecast on Surging AI Buildout
By Reuters | 04 Aug, 2026

Caterpillar shares were on track for their best day in over 17 years, after surging 12% in morning trading.

A couple looks at a Caterpillar 306 mini-excavator, with in-cab CAT AI Assistant, during CES 2026, an annual consumer electronics trade show, in Las Vegas, Nevada, U.S. January 7, 2026. REUTERS/Steve Marcus

Caterpillar raised its annual revenue growth forecast after beating second-quarter profit estimates on Tuesday, benefiting from a buildout of AI data centers that has spurred demand for its power-generation and construction equipment.

Shares of the company were on track for their best day in over 17 years, if gains hold, after surging 12% in morning trading. Caterpillar's stock surge also powered a 1.3% rise in the blue-chip benchmark Dow Jones industrial index.

The company cut its full-year tariff costs forecast to around $2.2 billion from the previously expected $2.2 billion to $2.6 billion.

Over the last few quarters, the equipment giant has seen a surge in orders for construction equipment amid a nationwide buildout of data centers as well as the backup power equipment needed for such buildings.

"Construction leading growth in the quarter was a standout," Oppenheimer analyst Kristen Owen said. The stock's reaction "reflects the importance of the durability of core Caterpillar businesses in sustaining the stock's momentum."

Caterpillar's results are often seen as a bellwether for the industrial economy. Its quarterly earnings beat and raised forecast signal that the AI-led demand boom for ancillary equipment is sustainable.

CONSTRUCTION PROWESS POWERS BEAT

In the April-to-June quarter, Caterpillar said it booked orders worth $9.4 billion, taking its order backlog to $72.1 billion.

Overall revenue grew 24% to $20.54 billion in the quarter ending June 30. Core construction segment revenue grew 35% in that period on strong retail sales, particularly in top market North America, where it recorded a 50% jump.

"Non-residential investment in critical infrastructure programs, heavy construction and data centers is contributing to overall construction spending levels," CEO Joe Creed told analysts in an earnings call.

The power and energy arm, meanwhile, posted 17% growth in revenue. The two segments accounted for a combined 81% of Caterpillar's total revenue.

The company builds power generators and backup power equipment under its power & energy segment, while its construction industries segment manufactures excavators and bulldozers.

Caterpillar also said it recorded an expected tariff recovery of $392 million in the second quarter.

It reported adjusted per-share profit of $8.17, compared with $4.72 per share a year earlier, well above analysts' expectation of $6.20 per share, according to data compiled by LSEG.

(Reporting by Nandan Mandayam in Bengaluru; Editing by Pooja Desai)