Why Caterpillar Shares Have Soared 175% in 12 Months

Shares of Caterpillar Inc. (NYSE: CAT) have climbed 175% over the past 12 months and are up 84% year-to-date, trading near $1,069 — a stunning run that has pushed the 100-year-old heavy equipment maker’s market capitalization to approximately $459 billion and earned it a spot in the newly rebalanced Russell Top 50 Index.

The rally reflects a powerful convergence of secular tailwinds. Chief among them is surging demand for Caterpillar’s natural gas turbines and industrial engines to power AI data centers. The company is a key supplier in high-profile projects, including a Chevron-Microsoft initiative to build dedicated power infrastructure for large-scale AI compute facilities. Analysts note that data center developers, unable to wait years for utility grid upgrades, are turning to Caterpillar’s on-site power solutions to bridge a widening electricity gap.

That demand is visible in the numbers. Caterpillar reported a record $63 billion order backlog in Q1 2026, and management raised its full-year 2026 revenue growth outlook to low double digits. Quarterly revenue grew 22% year-over-year, while earnings surged 30%, pushing trailing EPS to $20.05 — with Wall Street forecasting $24.60 for full-year 2026 and $30.11 in 2027.

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Beyond AI infrastructure, Caterpillar is benefiting from robust U.S. government infrastructure spending, a mining equipment replacement cycle tied to the global energy transition, and a recovering manufacturing sector that has now posted six consecutive months of expansion.

Shareholders are also being rewarded directly: the company recently raised its quarterly dividend by 8% to $1.63 per share, targeting $30 billion in services revenue by 2030. A Supreme Court ruling that struck down broad U.S. tariffs has further brightened the outlook, with Caterpillar among companies expected to receive meaningful import-duty refunds.

With a forward P/E of 41x and EV/Sales exceeding 6x — well above the company’s historical range of 2–4x — some value-oriented investors have flagged valuation risk. But for now, Wall Street’s bull case, powered by AI, infrastructure and energy, shows little sign of slowing down.