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Caterpillar's stock has surged 62% in 2025, fueled by increased demand for its natural-gas generators to power artificial intelligence data centers. The company is supplying over 700 generators to Joule Capital Partners for a data center project in Utah, which will require significant on-site electricity generation.

Caterpillar plans to invest $725 million to expand its Lafayette, Indiana plant and aims to double turbine-engine production capacity by 2030. Power-generation sales reached $7.8 billion in 2024, a 22% increase from the previous year.

The demand for electricity from data centers is expected to triple globally by 2035, prompting many developers to establish on-site power solutions. Caterpillar's focus on power generation is seen as a strategic pivot to enhance growth beyond traditional construction and mining sectors, with ongoing investor optimism supporting this shift.