Caterpillar Inc.

Caterpillar Inc. is the world's largest manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives, generating $67.6 billion in sales and revenues in fiscal 2025. The company distributes its machines through a network of 150 independent dealers serving 190 countries and finances a substantial share of customer purchases through its wholly owned subsidiary, Caterpillar Financial Services Corporation. In 2025, the company celebrated its centennial year and set an all-time quarterly revenue record of $19.1 billion in the fourth quarter.

This is a story about an industrial incumbent that spent the last century building the physical world and now finds itself positioned at the center of the defining capital investment wave of this decade: the build-out of infrastructure for artificial intelligence. The company's large reciprocating engines and turbines power the data centers that train and serve AI models, its mining equipment extracts the copper and minerals those data centers require, and its construction equipment builds the physical structures that house them. The question is not whether Caterpillar benefits — the record $63 billion order backlog says it already has — but how durable that demand proves to be and whether the tariff costs and capacity investments required to meet it allow enough to flow through to shareholders.

The file turns on a single debate: can the Power & Energy segment's data-center-driven growth outrun the margin compression that tariffs have imposed across the portfolio, and does the current valuation already discount a multiyear expansion that has yet to be built?