How the century-old tractor company Caterpillar became the darling of the AI ​​market

During the Gold Rush, legend said that the best way to get rich was not by panning for gold, but by selling “picks and shovels” to miners. And there is no better example of this strategy in action today than Caterpillar. There, the maker of massive mining and earthmoving equipment and iconic yellow construction site vehicles is capitalizing on the boom in artificial intelligence, achieving all-time highs in the stock and solid revenue growth.

The company’s shares have risen to record levels in recent weeks, taking its market capitalization from $270 billion at the end of 2025 to approximately $364 billion on February 13, 2026. The stock, which has more than doubled over the past 12 months to an all-time high of $775, has vastly outperformed technology giants like Apple (up 8%) and Microsoft (up about 1%) over the same period. And investors are betting that Caterpillar’s growing exposure to data centers, energy infrastructure and AI-related demand has not yet peaked. In fact, over the past 12 months, Caterpillar has been the biggest gainer in the Dow Jones.

Although Caterpillar is known for its yellow construction vehicles, it has greatly expanded its business mix to include energy and power systems, as well as natural resources and mining equipment. CEO Joseph Creed joined the company in 1997 and has held several roles, including CFO of energy and transportation and interim CFO. Creed was named COO of Caterpillar in 2023 and became CEO in May 2025.

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The company’s strategy is “centered on three pillars for profitable growth: commercial excellence, advanced technology leadership and transforming the way we work — all built on a foundation of ongoing operational excellence,” Creed said on a Jan. 29 earnings call.

Caterpillar (64th on the Fortune 500) reported fourth-quarter and full-year results that exceeded Wall Street expectations. Annual sales and revenue reached a record $67.6 billion, the highest in the company’s history, driven by strong demand in its construction, resources and energy businesses. Adjusted earnings per share (EPS) for the year was $19.06, while fourth quarter adjusted EPS was approximately $5.16, above analyst forecasts, which were in the $4 range.

The company also reported a record backlog of $51 billion, an increase of nearly 70% year over year, highlighting strong demand visibility for 2026. Total sales for the year grew 4% year over year, and Caterpillar generated robust free cash flow, further strengthening its balance sheet.

“Caterpillar shares have risen dramatically over the past year as investors consider the company’s exposure to growing demand for artificial intelligence,” Morningstar equity analyst George Maglares wrote in a recent note.

Instead of developing AI technology, Caterpillar provides critical equipment to power and support AI-powered infrastructure. The company provides turbines for primary power in data centers, generators for backup power and integrated microgrid systems that combine traditional energy sources with renewables and battery storage, Fortune’s Jordan Blum reported.

Maglares noted that Caterpillar’s construction and resources industries segments show signs of cyclical recovery. The company ended the year with double-digit growth across all major segments, suggesting strong momentum for 2026. Management forecasts revenue growth in the mid-single-digit range, between 5% and 7%, for the current year, a forecast that Morningstar considers potentially conservative given current demand trends.

Infrastructure spending in North America remains a key driver, especially with the expansion of public sector projects and private investments in energy and digital infrastructure, he said. Reflecting these trends, Morningstar recently raised its fair value estimate for Caterpillar shares to the low $600 range, citing improved guidance and stronger demand in end markets.

The company’s evolving revenue mix also highlights its shift into energy and power solutions. By 2024, Caterpillar’s energy and transportation segment generated about $28.8 billion in annual revenue, surpassing for the first time the $25.5 billion reported by its traditional construction industries business, Fortune noted. The move underscores the growing importance of power generation and energy systems in Caterpillar’s portfolio.

Caterpillar, which celebrated its centennial last year, remains fundamentally a cyclical business that rises and falls with the global economy. But for now, it may be the most surprising beneficiary of a boom that doesn’t appear to be ending soon.

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