How Data Centres Gave Caterpillar Its Best Day in 17 Years

The hottest industrial stock of 2026 does not make chips, code or clouds. It makes bulldozers, excavators and diesel generators.

Caterpillar, a 100-year-old maker of heavy machinery, just posted its best day on the market in 17 years. The shares jumped 12%, hauling the Dow up with them.

The trigger was a second quarter that beat on almost every line: record revenue of US$20.54bn, up 24%, adjusted earnings of US$8.17 a share against the US$6.20 analysts expected, and operating profit up by half to US$4.3bn. ​​​​​​​

What has investors excited is not the quarter but the order book behind it. Caterpillar's backlog hit a record US$72.1bn, up 92% on a year ago, with some orders running all the way to 2030.

The engine driving it is the global rush to build data centres, sites that need land cleared, foundations poured, buildings raised, then powered above all.

Where the money is coming from

Every data centre lets Caterpillar sell twice, first the machines that clear the ground, then the generators that power everything built on it.

Sales in the construction arm rose 35%, led by a 50% jump in North America. The power and energy business grew 17%.

Within it, sales of the large generator sets, plus the turbines that keep data centres running, climbed 72%. Together the two segments now make up more than four-fifths of the company.

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

Joe is betting the demand lasts. He has lifted Caterpillar's long-term growth target to between 6% and 9% a year through 2030, then set out to nearly triple the capacity of its big engine plants.

A capital-cycle story, not a hype one

For a finance leader, what matters is the kind of story the numbers tell. Most of the money in the data-centre boom gets counted in chips and cloud contracts. Now it flows to old-economy names like Caterpillar, whose turbines, generators, grid gear are the picks and shovels every data centre runs on.

A product cycle can fade in a quarter. A backlog is contracted revenue you can plan a factory around.

Kyle Epley, who became CFO in May, told analysts that 59% of the US$72bn backlog will ship within 12 months, a share steady for three quarters.

He called it proof the momentum is real, not a spike. The company also trimmed its expected full-year tariff bill to about US$2.2bn, easing one of the drags the market had feared.

Data centres are drawing political pushback. Moratoriums have appeared in Seattle and New York state, a new Florida law shields consumers from their power costs, and Baird analysts warn that a wave of restrictions could slow future investment.

Should the hyperscalers ever blink on spending, that backlog would thin fast.

For now they have not. A company long treated as a late-cycle bellwether, the stock you buy at the top and sell at the first crack, suddenly finds itself early in a buildout that could run for years.

That is a rare place for an industrial giant to stand. The market has noticed, with the shares up 48% this year.