Caterpillar Inc. (CAT) is emerging as a significant player in the AI landscape, particularly through its power and energy segment, which has seen a remarkable 23% revenue growth year-over-year in Q4 2025. This segment is capitalizing on the increasing demand for power generation solutions necessary to support the rapid expansion of data centers. With a $51 billion order backlog—up 71% from the previous year—Caterpillar is well-positioned to benefit from the anticipated 200% increase in electricity requirements for data centers by 2035.
The company’s strong performance has led to a doubling of its stock price over the past year, reflecting investor confidence in its growth trajectory. While shares are trading at 31 times this year’s earnings estimates, this valuation appears justified given the expected 18% annual earnings growth over the next three to five years.
For investors seeking exposure to the AI boom through a well-established company, Caterpillar offers a compelling opportunity, especially with its history of consistent dividend increases.
Source: fool.com