Why Is Caterpillar Stock Popping This Week?

Core Insights - Caterpillar's shares increased nearly 12% this week following strong third-quarter earnings that exceeded Wall Street expectations [1] - The company reported a revenue increase of 10% year-over-year, reaching a record $17.6 billion, surpassing the expected $16.8 billion [1] - Adjusted earnings per share were $4.95, beating the anticipated $4.52 by approximately 10% [1] Revenue Growth - Caterpillar's backlog grew by $2.4 billion, indicating strong future demand [2] - A notable contributor to revenue growth is the rise of artificial intelligence (AI), which was highlighted during the earnings call [3] - Sales in the energy and transportation segment, which includes equipment essential for data centers and AI infrastructure, surged by 17% [4] - Power generation equipment, a subsegment linked to data centers, experienced a significant sales growth of 31% in the quarter [4] Future Outlook - The CFO indicated that the acceleration in revenue is expected to continue into the fourth quarter [5] - Despite the impact of tariffs, estimated to cost between $1.6 billion and $1.75 billion for the year, the CEO described the situation as "manageable" [5] - The growth in AI-related revenue is seen as a key highlight and potential for significant upside for the stock if nurtured effectively [5]