Caterpillar’s Q2 sales rose 24% year over year to $20.5 billion and adjusted EPS rose 73% to $8.17; its backlog stood at $72.1 billion. Insider Monkey says data-center power demand may support growth, but valuation, tariffs and a possible construction slowdown pose risks.
Power & Energy revenue rose 33% year over year in Q2, while power-generation sales increased 72%, partly on demand for generator sets and turbines used in data centers. The backlog grew across all three main segments, with Power & Energy posting the largest increase; $29.2 billion was not expected to be filled within the following 12 months.
The stock traded at 25.25 times forward earnings, compared with a 22.14 sector median and its 20.28 five-year average. Caterpillar expects about $600 million in tariff costs in Q3. It also expects North American construction-equipment sales to grow in 2026, supported by critical infrastructure investment; the analysis warns that construction spending or equipment demand could eventually normalize.
