Why Has Caterpillar Stock Soared 184% in the Last 12 Months?

Caterpillar has delivered a 184% stock gain over the past 12 months, crushing the S&P 500's 25% return over the same period. The surge is anchored in the company's power and energy division, which supplies reciprocating engines and generator sets to AI data centers—a segment management expects to triple in sales between 2024 and 2030.

The AI infrastructure buildout has transformed CAT's growth profile beyond its traditional construction equipment base. The company's ability to capture this demand while maintaining its 32-year dividend growth streak positions it as both a growth and income play. Analysts see continued upside potential as data center expansion accelerates.

CAT's exposure to the AI theme through its power generation equipment differentiates it from pure construction plays. The projected tripling of power and energy division sales over the next six years provides a concrete revenue runway that supports the stock's premium valuation despite the recent run-up.