Caterpillar Inc. (NYSE:CAT) is included among the 20 Best Performing Dividend Stocks in 2025. Caterpillar (CAT) Finds a New Growth Engine in Data Center Power Demand Power-hungry AI projects have turned into a clear tailwind for Caterpillar Inc. (NYSE:CAT). The company sells engines and generators to a wide range of customers, and that side of the business is getting more attention. For decades, Caterpillar built much of its roughly $65 billion operation around massive yellow dump trucks, bulldozers, and ...

Caterpillar has long been known for construction equipment like bulldozers and dump trucks.By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions .Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.But these days, another side of the company’s business is powering sales: g ...

Core Insights - Sales of generators are driving significant growth for the manufacturing giant, marking it as the fastest-growing segment of the company [1] Group 1 - The manufacturing giant is experiencing a surge in generator sales, which is contributing to its overall growth [1]

Core Insights - The rise of artificial intelligence (AI) is leading to a significant increase in global energy demand, comparable to the industrial revolution [1] - Data center power demand is expected to grow by 160% by 2030, with data centers potentially consuming as much electricity as Japan does today [2] Energy Sector Overview - The AI boom is triggering a nuclear renaissance and a resurgence in natural gas infrastructure due to the need for baseload reliability [2] - Companies involved in nuclear energy, renewables, and natural gas are positioned to benefit from the increasing energy demands driven by AI [18] Key Companies - **Constellation Energy**: Owns the largest nuclear fleet in the U.S. and has a significant power deal with Microsoft, alongside a pending acquisition of Calpine for $26.6 billion [5] - **NextEra Energy**: The largest producer of wind and solar energy, now expanding into nuclear through a partnership with Alphabet to restart the Duane Arnold nuclear plant [7] - **Southern Company**: A major utility in Georgia, with over 50 GW of potential large-load growth, primarily tied to data centers [8] - **Dominion Energy**: Serves Northern Virginia, negotiating contracts for 40 GW to 47 GW of new data center capacity [9] - **Vistra**: Combines nuclear and gas generation, actively discussing co-locating data centers with its plants [10] - **Entergy**: Dominates the Gulf Coast region with a pipeline of 7 GW to 12 GW of data center projects [12] - **Williams Companies**: Controls 30% of U.S. natural gas volume and is developing co-located gas-fired generation for data centers [13] - **Kinder Morgan**: A major energy infrastructure company, crucial for supplying gas-fired power plants [14] - **GE Vernova**: Manufactures turbines and generators for various energy sources, experiencing a surge in gas turbine orders [15] - **Cameco**: The premier uranium supplier in the Western world, benefiting from commitments to restart or build nuclear reactors [16]

Core Insights - Generac Holdings Inc. is a prominent player in the backup power industry, focusing on designing and manufacturing generators, energy storage systems, and digital energy management tools, with a market capitalization of $8.57 billion [1] Stock Performance - Generac's stock has experienced significant volatility, declining by 20.4% over the past 52 weeks and 23.4% over the last three months, with a notable drop of 28.2% from its 52-week high of $203.25 reached in August [2] - In comparison, the S&P 500 Index has gained 11% and 3.7% over the same periods, indicating that Generac has underperformed relative to the broader market [3] Financial Results - In the third quarter of fiscal 2025, Generac reported net sales of $1.11 billion, a 5% year-over-year decrease, falling short of the $1.20 billion expected by analysts, attributed to a lower-than-average power outage environment [4] - The adjusted EPS for the same quarter was $1.83, down 18.7% from the previous year and missing the expected $2.25 [4] Future Expectations - For fiscal year 2025, analysts project a 10.9% decline in EPS to $6.48, but anticipate a recovery with a 25.6% increase to $8.14 in fiscal 2026 [5] - Generac has a history of exceeding consensus estimates, having surpassed them in three of the last four quarters [5]

Core Insights - Home Depot reported disappointing Q3 results, with stock prices dropping as much as 5% in early trading [1] - Revenue increased by 2.8% year-over-year to $41.4 billion, but adjusted diluted earnings per share fell to $3.74, missing both the previous year's figure and Wall Street expectations [2] - The company has revised its full-year earnings guidance, now expecting a 5% decline in diluted earnings per share for 2025 compared to 2024, a downgrade from the previous forecast of a 2% decline [3] Financial Performance - Q3 revenue was $41.4 billion, reflecting a 2.8% increase from the previous year [2] - Adjusted diluted earnings per share were $3.74, which is $0.04 lower than the same period last year and $0.10 below analyst expectations [2] Market Conditions - The U.S. housing market remains stagnant, significantly impacting Home Depot's sales, particularly in storm recovery and repair items [3][4] - Elevated borrowing rates and a shortage of housing supply have contributed to a gridlock in the housing market, affecting both potential home buyers and current homeowners [6] Competitive Landscape - Competitor Lowe's has also experienced a decline in stock prices, down nearly 9% this year, reflecting the broader challenges in the home improvement sector [7] Future Outlook - The National Association of Realtors predicts a potential recovery in the housing market by 2026, contingent on job growth and lower mortgage rates [8] - Home Depot's inventory is significantly affected by tariffs, with nearly half sourced from outside the U.S., leading to modest price increases despite initial commitments to avoid raising prices [9] - The overall sentiment suggests that home improvement stocks may continue to face challenges until there is a clear recovery in the housing market [10]

Core Insights - Home Depot has cut its full-year outlook due to a slowdown in consumer spending, with comparable sales rising only 0.2%, and US comps up by 0.1%, falling short of Wall Street expectations [1][3][7] - The company is experiencing a decline in demand as middle-class shoppers are becoming more cautious, influenced by high borrowing costs and a sluggish housing market [3][4] - External factors such as milder weather and a lack of storms have negatively impacted sales of seasonal products, further contributing to the decline in home improvement demand [4][5] Group 1: Company Performance - Home Depot reported weakening sales growth for Q3, with a significant drop in expected demand [2][3] - The company had anticipated better results due to easing interest rates, but this did not materialize [3][4] - The decline in home improvement projects is estimated at 0.8% from the previous year, particularly affecting big-ticket remodels that require financing [5] Group 2: Industry Trends - The slowdown in consumer spending is part of a broader trend affecting the retail sector, with many retailers facing similar challenges [6][8] - Analysts indicate that the consumer backdrop is deteriorating quickly, moving from "soft to softer" as winter approaches [4][7] - Uneasy consumers are shifting their spending towards travel and leisure rather than home upgrades, impacting overall demand in the home improvement sector [5][6]

SmileStudioAP/iStock via Getty Images Fall 2025 Market Commentary Despite geopolitical upheavals, tariff and trade uncertainties, global equity markets had a very strong third quarter. The US economy and market have been boosted by a pause in punitive tariffs and a robust capital investment boom in Artificial Intelligence (AI). By some measure up to half of the 3.8% gain in GDP was attributable to tech capital spending. A surge in global defense outlays have helped boost the aerospace and defense industr ...

AI and Data Center Market Opportunity - AI 驱动的需求预计未来 5 年内将新增 100 吉瓦（GW）的电力需求，相当于 20 个纽约市的用电量 [12] - Generac 认为 AI 带来的电力需求增长对公司有利，既增加了备用电源的需求，也暴露了电网的不足 [9][10] - 数据中心项目单个站点的电力需求巨大，有些站点需求高达 500 兆瓦（MW）甚至 1 吉瓦（GW）[21] Generac's Business Expansion - Generac 正在大力投资数据中心业务的扩张 [1] - Generac 的商业和工业（CNI）业务在未来 3-5 年内预计将翻倍，从目前的 15 亿美元增长到 30 亿美元 [3][20] - Generac 在威斯康星州开设了一家新工厂，以提高大型发电机组的产能，满足全球需求 [8] - Generac 在大型发电机类别中面临巨大的供应缺口，需求超过供应 [7][19] Products and Services - Generac 的产品主要用于数据中心的紧急备用电源，而非主要电源 [16] - Generac 已经营发电机业务 65 年，主要面向住宅市场，现在正在扩展到更大的 CNI 市场 [5][6] - 住宅备用发电机在美国的普及率持续增长，7% 的美国家庭拥有家用备用发电机 [14] Financial Performance and Market Dynamics - Generac 的 CNI 业务目前为 15 亿美元 [3][20] - 由于供应短缺，大型发电机组的利润率非常可观 [18][19] - 过去三到四年，Generac 的产品价格上涨了 20%，这影响了消费者的购买决策，融资成为更重要的支付手段 [15] - Generac 的积压订单已增长至 3 亿美元 [3]

Core Viewpoint - The company is experiencing significant growth in its data center business, driven by increasing demand for backup power solutions due to the rise of AI and power shortages [3][12][20]. Company Insights - The company has a backlog of $300 million in orders and anticipates doubling its commercial and industrial (CNI) business from $1.5 billion to $3 billion in the next 3 to 5 years [3][20]. - The company has been in the generator business for 65 years, primarily known for residential products, but is now expanding into larger industrial generators [5][6]. - The company is ramping up production at a new facility in Wisconsin to meet global demand, with shipments already occurring in Australia [8][9]. Industry Context - The demand for power is expected to increase significantly, with AI projected to add 100 gigawatts of new demand over the next five years, equivalent to the power needs of 20 New York City-sized populations [12]. - The residential generator market is growing, with 7% of U.S. households now owning a standby generator, although price increases of 20% over the last few years are impacting consumer purchasing decisions [14][15]. - The company’s products are primarily for emergency backup power, addressing the growing issue of power outages caused by insufficient supply rather than just weather-related events [10][16]. Competitive Landscape - Competitors like Caterpillar and Cummins are also performing well in the generator market, indicating strong demand and supply constraints in the industry [19].