Caterpillar (CAT) Positioned for Long-Term Growth as Power Demand from Data Centers Surges

Caterpillar Inc. (NYSE:CAT) is included among the 10 Best Quality Dividend Stocks to Buy According to Reddit.

Caterpillar Inc. (NYSE:CAT)’s business spans construction and mining machinery, engines that run on diesel and natural gas, industrial turbines, and even locomotives. The company reports through three main segments: Construction Industries, Resource Industries, and Power & Energy.

Lately, the story around Caterpillar has been picking up momentum. Much of the attention in the market has gone to data centers, especially how quickly they are being built. Building data centers or producing chips can move quickly, unlike power infrastructure. Setting up generation capacity, getting approvals, building substations, and laying transmission lines takes time. In many cases, far more time than the data centers themselves. That gap is where Caterpillar is finding opportunity.

Its Power & Energy segment provides on-site solutions like large generators, battery storage systems, and switchgear. These systems allow companies to run operations even while the broader grid is still catching up. The demand is already showing up in the numbers. Revenue from the Power & Energy segment rose 23% year over year in Q4 2025, making it the company’s largest division. At the same time, Caterpillar ended the year with a $51 billion order backlog, up 71% from the prior year. There is also a longer-term angle here, as equipment sales today tend to lead to ongoing service and maintenance work later. That creates a steady stream of recurring revenue. Management has pointed to projections that electricity demand from data centers could increase by 200% by 2035. If that plays out, the need for reliable, scalable power solutions is unlikely to fade anytime soon.

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