Caterpillar CAT shares continue to deliver a stellar performance in 2026, up more than 60% and widely outperforming the S&P 500. The stock represents a clear favorite for gaining exposure to the artificial intelligence (AI) buildout given the performance, with its consistent dividend payouts over time making it attractive to investors with an appetite for income.
In fact, the company is a member of the elite Dividend Aristocrats group, owing to its shareholder-friendly nature.
Data Center Trends Power CAT Shares
Caterpillar posted robust results in its latest release, continuing a streak of impressive numbers over the past year or so on the back of growing demand. Sales of $17.4 billion grew by an impressive 22% YoY, with its backlog also reflecting a company record.
Its Power and Energy segment in the above-mentioned quarter helped drive the strong results, with sales of $7.0 billion climbing more than 20% year-over-year thanks to higher demand for power products used in data center applications, primarily large reciprocating engines.
Specifically in Power Generation applications, sales grew by 41% year-over-year, underscoring its favorable position in data center applications. Below is a chart illustrating the company’s YoY quarterly sales growth rates, with clear acceleration evident over recent periods.
Image Source: Zacks Investment Research
The outsized sales growth has helped keep shares near all-time highs, with Caterpillar’s shareholder-friendly nature also a major positive, as it deployed $5.7 billion in cash for share repurchases and dividend payouts throughout the period.
Sales revisions for its current and next fiscal years remain bullish, driven by a strong demand environment.
Image Source: Zacks Investment Research
Unsurprisingly, EPS revisions for its current and next fiscal years also reflect the same bullish trend.
Image Source: Zacks Investment Research
The stock has undeniably gotten more expensive, with the current 34.1X forward 12-month earnings multiple well above the 16.4X five-year median. But the accelerating earnings growth helps support the richer multiple, with current Zacks Consensus estimates suggesting 30% EPS growth in its current FY26 and 24% in FY27.
Bottom Line
Caterpillar CAT has emerged as a strong AI infrastructure play, particularly on the power side. Red-hot demand pictures stemming from the buildout have led to record-breaking quarterly results, with shares benefiting in a big way. It’s reasonable to expect continued momentum as companies scramble to secure power products for their data centers, a trend that appears set to continue for at least a few years.
Caterpillar isn’t the only stock with notable AI exposure that pays investors, with Vertiv VRT and Eaton ETN also on the list. Both Vertiv and Eaton have similarly had strong runs in 2026 thanks to their role in the buildout, seeing immense growth in their backlogs as well.
Analysts have bullishly raised their sales expectations for Vertiv for both its current and next fiscal years, underpinning the favorable demand outlook.
Image Source: Zacks Investment Research
The same can be said for Eaton, who is also enjoying positive sales revisions across the same timeframes.
Image Source: Zacks Investment Research
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Caterpillar Inc. (CAT): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).