Caterpillar (NYSE:CAT) delivered a sharp rise in fourth-quarter revenue that comfortably topped Wall Street expectations, as surging investment in artificial intelligence infrastructure boosted demand for the company’s power and energy equipment.
Heavy spending on data centres required to support advanced AI models has increased the need for Caterpillar’s power-generation systems in recent quarters, helping propel the stock up more than 65% over the past year.
Revenue in the power and energy division reached $9.4 billion, up 23% year on year, driven by higher volumes and pricing. Segment profit climbed 25% to $1.84 billion. The company’s construction equipment business also benefited from a U.S. policy focus on large-scale energy projects.
Shares of the Irving, Texas-based group were up more than 5% in premarket U.S. trading on Thursday.
At the group level, revenue for the quarter ended December rose 18% to $19.13 billion, beating Bloomberg consensus estimates of $17.91 billion. Adjusted earnings per share increased to $5.16, compared with $5.14 a year earlier and well ahead of analyst forecasts of $4.69.
Chief executive Joe Creed said the results “demonstrate the strength of our end markets and our disciplined execution,” adding that Caterpillar’s “record backlog” positions the company with “strong momentum” heading into 2026.
Caterpillar said it is targeting annual sales and revenue growth “around the top end” of its previously outlined compound annual growth rate range of 5% to 7%. However, analysts at Vital Knowledge noted that the company’s margin expansion outlook came in slightly below expectations, reflecting incremental costs of roughly $2.6 billion tied to broad U.S. tariffs.