Caterpillar’s turbine business continues to ride AI-related growth.
- Power Generation grew 44% in the fourth quarter for Caterpillar, driven by strong demand for large gensets and turbines used in data center applications.
- Bank of America said it has observed additional data points indicating a “broadening out” of the company’s turbine demand beyond data centers.
- Analysts on average have a ‘Buy’ rating on Caterpillar, according to Koyfin, with 15 analysts having a ‘Buy’ or higher rating.
Caterpillar Inc.’s shares closed at a record high on Wednesday as retail traders and Wall Street cheered growth in the company’s turbine business, which is powering AI-related infrastructure.
The stock finished 4% higher, after touching a new 52-week intraday high of $756.10, marking a fourth straight session of gains and lifting Caterpillar’s market value to about $362 billion. Surging demand for electricity to run data centers has boosted results, with the company reporting a 37% increase in sales in its Power and Energy segment.
Caterpillar has described the unit as its largest and fastest-growing segment, noting that Power Generation revenue rose 44%, driven by strong demand for large gensets and turbines used in data center applications.
Shares are up nearly 36% so far this year, putting the stock on track for an eighth consecutive year of gains. In 2025, Caterpillar surged more than 60%, its best annual performance since 2017.
Turbine Demand Surges For Caterpillar
Bank of America on Tuesday raised the firm’s price target on Caterpillar to $825 from $735, according to TheFly. The firm said it has observed additional data points indicating a “broadening out” of the company’s turbine demand beyond data centers, which should ease concerns about overcapacity. The “eyepopping growth” in Caterpillar’s power generation unit is clear, Bank of America said.
Last week, DA Davidson said that top-line growth appears in the cards for all three segments of the company in 2026, led by Datacenters, though this is tempered somewhat by a low-end margin range as Caterpillar continues to absorb costs amid a wait-and-see approach to tariffs.
Analysts on average have a ‘Buy’ rating on Caterpillar, according to Koyfin, with 15 analysts having a ‘Buy’ or higher rating, 12 ‘Hold’, and two ‘Sell.’ The average price target on the stock was $692.32, implying a 13% downside to the last closing price of $775.
What Is Retail Thinking About CAT?
Retail sentiment on Caterpillar jumped to ‘bullish’ from ‘bearish’ territory a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.
A user on Stocktwits said that the gas turbine business was “on fire” and the stock was going to go “much higher.”
Shares of Caterpillar have more than doubled in the last 12 months.
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