Caterpillar Lifts Outlook as AI-Fueled Power Demand Persists — Update

By Connor Hart

Caterpillar said demand for its construction equipment, engines and generators remains strong despite rising geopolitical tensions and higher energy prices.

The company, known for its giant yellow dump trucks, bulldozers and excavators, is closely monitoring macroeconomic conditions in case recent pressures begin to weigh on demand, Chief Executive Joe Creed said on a call with analysts Thursday.

As of now, though, the added uncertainty hasn't been an issue.

Caterpillar raised its full-year outlook after reporting higher profit and sales in the latest quarter, helped in part by strong demand for large power-generation equipment used in data centers supporting artificial intelligence.

The AI boom is spurring additional construction activity, Creed said, providing a lift to the company's other business units. Caterpillar is also expecting some tariff relief, noting that costs tied to the levies this year won't be as steep as what was initially expected.

Shares were recently trading 9.2% higher, at $884.50, on track for a new all-time closing high. The rally extended the stock's year-to-date gain to more than 54%.

Sales across Caterpillar's power-and-energy division jumped 22% during the latest quarter. Growth is expected to continue in coming quarters, thanks to increasing energy demand to support data-center buildouts tied to cloud computing and generative AI, Creed said.

To meet surging demand, Caterpillar previously said it would spend $725 million at its Lafayette, Ind., plant to make more piston-driven engines for generators, marking its largest factory investment in about 15 years, The Wall Street Journal reported. Separately, it wants to more than double the production capacity for turbine engines by 2030.

"Notably, we're tracking ahead of our large-engine capacity expansion plans for the year," Creed said.

Sales across Caterpillar's construction-industries segment surged 38% in the recent quarter, while sales from the company's resource-industries division ticked 3.7% higher. Total sales and revenue for the period increased 22% to $17.42 billion and topped Wall Street models for $16.53 billion, according to FactSet.

The company said it now expects top-line growth in the low-double-digit percent range for the year. It previously guided for growth toward the high end of its long-term target for a 5%-to-7% compound annual growth rate.

Caterpillar additionally cut its outlook for tariff costs to a range of $2.2 billion to $2.4 billion in 2026, down from a prior forecast of about $2.6 billion.

First-quarter profit came in at $2.55 billion, or $5.47 a share, up from $2 billion, or $4.20 a share, a year earlier. Stripping out one-time items, adjusted earnings were $5.54 a share, ahead of analyst views for $4.65 a share.

Write to Connor Hart at connor.hart@wsj.com

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April 30, 2026 10:59 ET (14:59 GMT)