Caterpillar Shares Climb 3% on AI-Driven Q4 Revenue Surge

Core Insights - Caterpillar reported fourth-quarter revenue that surpassed Wall Street expectations, driven by strong demand for power-generation equipment linked to artificial intelligence infrastructure, resulting in a more than 3% increase in shares intraday [1] - The company's stock has seen a more than 65% rise over the past year due to increased spending on data centers supporting advanced AI models [1] Financial Performance - Sales in the power and energy segment reached $9.4 billion, reflecting a 23% year-over-year increase, with segment profit rising 25% to $1.84 billion [2] - Overall quarterly revenue was reported at $19.13 billion, an 18% increase from the previous year, significantly exceeding Bloomberg consensus estimates of $17.91 billion [2] - Adjusted earnings per share increased to $5.16, compared to $5.14 a year ago and above analyst expectations of $4.69 [2] Management Commentary - CEO Joe Creed indicated that the results were a reflection of strong end-market demand and disciplined execution, highlighting a record backlog that positions the company with solid momentum heading into 2026 [3] Future Outlook - The company reiterated its goal of achieving annual revenue growth near the upper end of its previously stated 5% to 7% compound annual growth range [4] - Analysts noted that margin expansion guidance was slightly below expectations due to approximately $2.6 billion in incremental costs related to U.S. tariffs [4]