NEW YORK, December 30, 2025, 08:26 ET
Demand for Caterpillar’s natural-gas generators to power artificial intelligence (AI) data centers is increasingly driving its shares, the Wall Street Journal reported on Tuesday, describing the stock as up about 62% this year. One Utah project led by Joule Capital Partners is set to use more than 700 Caterpillar generators to support six data centers, the paper said. The Journal said Caterpillar is investing $725 million to expand a Lafayette, Indiana plant and plans to more than double turbine-engine production by 2030 after power-and-energy sales rose 22% to $7.8 billion in 2024.
The scramble for electricity has become a near-term constraint for developers as utilities grapple with long interconnection queues and new grid investment. More projects are turning to on-site generation, where power equipment sits at the data center, to bring capacity online faster.
That shift matters for Caterpillar because investors have long treated the company as a proxy for construction and mining cycles. Power equipment tied to AI data centers can smooth those swings and keep factories running even if excavator demand cools.
Caterpillar shares (CAT) were at $578.61 in premarket trade on Tuesday, down about 0.7% from the prior close.
The stock ended the Dec. 26 regular session at $583 and sat about 7% below a recent all-time high near $627.50, according to a TechStock² weekend market wrap. The same report said several earnings calendars estimate Caterpillar’s next report around Jan. 29, 2026, though dates can change.
“Caterpillar is reorienting its operations to be more in the power generation market,” said Jonathan Sakraida, a senior CFRA analyst, in commentary published by Invezz on TradingView. The note framed power-generation growth as outpacing Caterpillar’s traditional construction and mining end-markets. TradingView
Caterpillar last reported quarterly results on Oct. 29, when it posted third-quarter sales and revenues of $17.6 billion, up about 10% from a year earlier, with demand from power-hungry AI data centers lifting generator sales, Reuters reported. Its Energy & Transportation unit posted a 17% rise in sales to about $7.2 billion, and the company forecast annual tariff costs of $1.6 billion to $1.75 billion.
Rival Cummins has also flagged data-center and other mission-critical demand as a driver for its power-generation business.
A regulatory filing on Monday showed Caterpillar CEO Joseph E. Creed received 26 phantom stock units—an incentive that tracks the share price and is paid out later—under a non-qualified deferred compensation plan. The units were credited at $583 and will be settled in cash upon retirement or separation, the filing said.
For now, the question for investors is whether on-site generation remains a stopgap or becomes standard in the next wave of AI data-center builds.
Caterpillar’s push to add capacity comes with familiar risks in heavy industry, where demand can turn quickly. Tariffs, interest rates and a slower construction backdrop remain part of the equation even as generator orders rise.
