Caterpillar rides strong AI power demand to a big earnings beat - and a stock surge

By Nora Redmond and Tomi Kilgore

The stock sees its biggest gain in six months and boosts the Dow Jones Industrial Average by more than 500 points

Shares in Caterpillar have risen about 55% since the start of the year.

Construction-equipment maker Caterpillar has comfortably beat expectations in its first quarter, with earnings per share beating Wall Street estimates by the widest margin in years.

The company (CAT) is known as a manufacturer of construction and mining equipment, but results in the latest quarter got a big boost from the artificial-intelligence buildout. And that's expected to continue.

"We anticipate growth in power generation for both reciprocating engines and turbines, driven by increasing energy demand to support data-center buildout related to cloud computing and generative AI," CEO Joe Creed said on the post-earnings call with analysts, according to a FactSet transcript.

The stock shot up 10.1% in recent midday trading to put it on track for the biggest one-day gain since it ran up 11.6% on Oct. 29, 2025. That rally was having a significant impact on the Dow Jones Industrial Average DJIA, adding 504 points to the price of the Dow, which was up 728 points.

The Irving, Texas-headquartered company reported earnings per share for the quarter to March 31 that rose to $5.54 from $4.25 a year ago and beat analysts' forecasts of $4.65, according to data compiled by FactSet. That marks the widest margin for a bottom-line beat since the second quarter of 2023.

The 101-year-old company posted revenue of $17.4 billion for the period, up more than 20% since the first quarter of 2025. The forecast was for $16.5 billion.

For the year, it's forecasting low-double-digit revenue growth and an adjusted operating profit margin near the bottom of its target range.

"Our team delivered a strong start to the year, driven by resilient end markets and disciplined execution in a dynamic operating environment," Creed said in a statement published Thursday. "A record backlog provides a strong foundation for continued positive momentum."

Caterpillar said its revenue boost was driven by better pricing and an increase in sales across its three main units.

Within the company's power and energy business segment, power-generation sales jumped 48% due to strong demand from data centers. And construction industries sales powered up 38%, as equipment dealers resumed the buildup of inventories.

Analysts at RBC Capital Markets led by Sabahat Khan wrote in a note on Thursday that they believe strong performance in the power and energy and construction segments "positions the company well for the remainder of 2026 and beyond."

The company has emerged as a key player in the buildout of data centers, providing heavy machinery as well as power solutions. In January, Caterpillar announced that it has agreed to supply two gigawatts of natural gas generator sets to a West Virginia data-center development.

Caterpillar's stock has rallied 55.7% in 2026, while the Dow has gained 3.2%.

-Nora Redmond -Tomi Kilgore

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04-30-26 1234ET