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Caterpillar raised its 2026 annual revenue growth forecast and reported a blowout second quarter, sending shares on track for their best single day in over 17 years.
Overall revenue grew 24% to $20.54B in the quarter ending June 30. The company booked $9.4B in new orders, pushing its total backlog to a record $72.1B.
The AI buildout is doing heavy lifting here. Data center developers need enormous amounts of electricity, and Caterpillar's power and energy segment supplies both backup generators and primary power equipment for those facilities.
That segment posted 17% revenue growth in the quarter. Its construction segment, which makes excavators and bulldozers used to build the data centers themselves, grew 35%, with North America alone jumping 50%.
"Non-residential investment in critical infrastructure programs, heavy construction and data centers is contributing to overall construction spending levels."
Joe Creed, CEO, Caterpillar
Caterpillar isn't just riding existing capacity. The company converted an existing plant in Wamego, Kan., to produce turbine engines popular with data centers.
It's also resuming production of 10-megawatt generators (last made in 2022) with shipments expected to begin in the fourth quarter.
Creed said the restart required no significant new investment, relying instead on its existing supply base.
The company trimmed its full-year tariff cost estimate to ~$2.2B, down from a prior range of $2.2B to $2.6B. It recorded a $392M tariff recovery in the second quarter, which helped offset manufacturing cost pressure across all segments.
On the financing side, Cat Financial, Caterpillar's lending subsidiary, posted Q2 revenues of $991M, up 10% year over year. Retail new business volume rose 9% to $3.92B. Past-due rates improved, falling to 1.31% from 1.62% a year earlier, a sign that customers are staying current on equipment loans.
The strong quarter extends a trend that first became visible earlier in 2026. In Q1, Caterpillar raised its long-term outlook to 6%–9% annual growth through 2030, up from a prior range of 5%–7%.
CEO Creed said the backlog for some power-generation equipment has more than tripled since 2024, with some customer commitments extending well into 2028.
Oppenheimer analyst Kristen Owen called construction's performance a standout and said the stock's reaction reflects the importance of durability in Caterpillar's core businesses.
The combined power and energy and construction segments accounted for 81% of total revenue in the quarter, making them the engine of the entire company.
