Caterpillar Inc. forecast higher annual revenue on Wednesday, driven by surging demand for power equipment used in artificial intelligence data centers. The heavy equipment maker reported a rise in quarterly profit, fueled by strong sales in construction and power sectors.
AI Buildout Fuels Growth
The company's power generation and energy storage systems are benefiting from the rapid expansion of AI infrastructure, which requires massive amounts of electricity. Caterpillar now expects 2026 revenue to exceed its prior outlook, as data center operators invest heavily in backup power and grid stabilization equipment.
Quarterly Results
For the first quarter, Caterpillar posted adjusted earnings per share of $5.86, beating analyst estimates of $5.42. Revenue rose 8% to $17.2 billion, with construction industries up 6% and energy & transportation up 12%. The company cited strong demand in North America and Asia-Pacific.
Market Reaction
Shares of Caterpillar rose 2.3% in premarket trading following the announcement. Analysts at JPMorgan noted that the AI-related power demand represents a new growth catalyst for the company, which has traditionally been tied to construction and mining cycles.
CEO Jim Umpleby said in a statement: "We are seeing unprecedented demand for our power solutions as customers build out AI infrastructure. Our backlog for large engines and generators is at record levels."
The company also raised its full-year revenue guidance to a range of $70 billion to $72 billion, up from $68 billion to $70 billion previously.
