Caterpillar lifts 2026 sales growth forecast as AI buildout powers on

Caterpillar lifts 2026 sales growth forecast as AI buildout powers on

Nandan Mandayam

Tue, August 4, 2026 at 1:44 PM GMT+3 2 min read

• CAT +0.86%
• ^DJI +0.69%

By Nandan Mandayam

Aug 4 (Reuters) - Caterpillar raised its annual revenue growth forecast after beating second-quarter profit estimates on Tuesday, benefiting from a buildout of AI data centers ‌that has spurred demand for its power-generation and construction equipment.

Shares of the company, ‌which rose as much as 12% in early trading, were last up around 7%, on track for their best ​day in more than three months if gains hold. Caterpillar's stock jump also helped fuel a 1.8% rise in the blue-chip benchmark Dow Jones industrial index.

The company cut its full-year tariff costs forecast to around $2.2 billion from the previously expected $2.2 billion to $2.6 billion.

Over the last few quarters, the equipment giant ‌has seen a surge in ⁠orders for construction equipment amid a nationwide buildout of data centers as well as the backup power equipment needed for such buildings.

"Construction leading growth in ⁠the quarter was a standout," Oppenheimer analyst Kristen Owen said. The stock's reaction "reflects the importance of the durability of core Caterpillar businesses in sustaining the stock's momentum."

Caterpillar's results are often seen as a ​bellwether for ​the industrial economy. Its quarterly earnings beat and ​raised forecast signal that the AI-led ‌demand boom for ancillary equipment is sustainable.

CONSTRUCTION PROWESS POWERS BEAT

In the April-to-June quarter, Caterpillar said it booked orders worth $9.4 billion, taking its order backlog to $72.1 billion.

Overall revenue grew 24% to $20.54 billion in the quarter ending June 30. Core construction segment revenue grew 35% in that period on strong retail sales, particularly in top market North America, where it recorded a 50% jump.

"Non-residential investment ‌in critical infrastructure programs, heavy construction and data centers ​is contributing to overall construction spending levels," CEO Joe Creed ​told analysts in an earnings call.

The ​power and energy arm, meanwhile, posted 17% growth in revenue. The two ‌segments accounted for a combined 81% of ​Caterpillar's total revenue.

The company builds ​power generators and backup power equipment under its power & energy segment, while its construction industries segment manufactures excavators and bulldozers.

Caterpillar also said it recorded an expected tariff recovery ​of $392 million in the second ‌quarter.

It reported adjusted per-share profit of $8.17, compared with $4.72 per share a year earlier, well ​above analysts' expectation of $6.20 per share, according to data compiled by LSEG.

(Reporting by ​Nandan Mandayam in Bengaluru; Editing by Pooja Desai)