When the Dow Jones Industrial Average’s best-performing stock loaded onto the screen Thursday, the first instinct was to check for a data error. Caterpillar Inc. (NYSE:CAT) had returned 185% over the trailing twelve months.
The second-best Dow performer, Nvidia Corp. (NASDAQ:NVDA), had returned 80%.
A bulldozer maker more than doubled the return of the chip company that defined the AI trade.
Then Caterpillar reported first-quarter 2026 results before the open and the stock ripped roughly 9% to a fresh all-time high near $889.
The catalyst is no longer hiding.
Best-Performing Dow Jones Stocks Over The Past Year
| Company | 1-Year Performance |
|---|---|
| Caterpillar Inc. | +190.74% |
| Nvidia Corp. | +85.07% |
| The Goldman Sachs Group Inc. (NYSE:GS) | +68.76% |
| Cisco Systems Inc. (NASDAQ:CSCO) | +57.60% |
| Johnson & Johnson (NYSE:JNJ) | +47.12% |
| Chevron Corp. (NYSE:CVX) | +42.53% |
| Amazon.com Inc. (NASDAQ:AMZN) | +40.60% |
The Q1 Print That Confirmed The Trade
Caterpillar reported Q1 2026 sales and revenues of $17.4 billion, up 22% versus $14.2 billion a year earlier and roughly $900 million ahead of the LSEG consensus near $16.5 billion.
Adjusted earnings per share came in at $5.54, up 30% year-over-year and almost a full dollar above the $4.62 consensus.
The headline number that reset Wall Street’s frame was the backlog: $63 billion at quarter-end, up $28 billion or 79% from a year ago, and $11.5 billion higher than just three months earlier.
That is not a cyclical machinery print. That is a multi-year visibility number.
Q1 2026 — Caterpillar At A Glance
- Sales and revenue: $17.4 billion, up 22% year over year
- Adjusted EPS: $5.54, up 30% year over year
- Operating margin: 17.7%, down 40 basis points
- Power & Energy revenue: $7.03 billion, up 22%
- Power generation sales: $2.82 billion, up 41%
- Backlog: $63 billion, up 79% year over year
- Capital returned to shareholders: $5.7 billion
The Catalyst: Caterpillar Became An AI Trade
The Power & Energy segment, roughly 40% of Caterpillar’s sales, is the engine of the rerating. Inside that segment, power generation revenue surged 41% to $2.82 billion in Q1, almost entirely tied to large reciprocating engines, gas turbines, and turbine-related services going into data center applications.
The mechanism is straightforward. Hyperscalers and AI infrastructure operators cannot wait the six-to-eight years it now takes to secure grid interconnect in some U.S. regions.
So they are building “behind-the-meter” — putting their own gas-fired power plants directly on site.
Those plants run on Caterpillar engines and Solar Turbines, the brand Caterpillar has owned for decades and that until 2024 most equity investors barely tracked.
On Thursday’s call, CEO Joe Creed told analysts the company is now planning to expand large reciprocating engine capacity to nearly three times its 2024 level. Investments will be heavy in 2027 and continue through 2029.
“Our team delivered a strong start to the year, driven by resilient end markets and disciplined execution in a dynamic operating environment. A record backlog provides a strong foundation for continued positive momentum,” Joe Creed said.
Why It Now Doubles Nvidia: Structural, Not Just Cyclical
Nvidia sells the chips. Caterpillar sells the power that runs the chips. Both are AI plays, but the market spent 2024 and most of 2025 paying for one and ignoring the other.
Once gigawatt-scale prime power orders started landing the rerating started.
For households, the story rhymes with what they are already feeling at the meter. U.S. residential electricity prices have climbed steadily as utilities scramble to add capacity for AI workloads.
Data centers in some service territories are pulling so much load that local rates are rising 10% to 20% in a single year. The infrastructure being built to supply that demand — the engines, the turbines, the pipelines — is what is sitting in Caterpillar’s $63 billion backlog.
The pure cyclical case alone would not justify CAT trading at 36x forward earnings, well above its 15-year historical band of 15x to 18x.
The structural case can.
Wall Street Has Been Chasing The Stock
Bank of America analyst Michael Feniger raised his price objective on Caterpillar to $930 from $825 on April 24, reiterating a Buy rating.
Feniger now values the stock at 29 times his 2027 EPS estimate, which he raised to $32 from $30. He argued in his note that the company’s oil and gas portfolio could deliver a second leg of upside in 2027 as North American upstream spending recovers 10% to 15% following the Iran conflict, broadening equipment demand beyond the data center power story.
Wells Fargo’s Jerry Revich lifted his target to $960 from $870 on April 21, the highest active target on the Street, citing fresh Solar Turbines projects and expanding gas compression demand running three times year-over-year.
Truist Securities raised its target to $920 from $786 on April 20, also keeping a Buy. Citi sits at $905. Jefferies is at $900.
Per Benzinga Analyst Stock Ratings, Caterpillar holds a consensus rating in Moderate Buy territory across 24 covering analysts.
The Morgan Stanley line is worth holding next to the others. Angel Castillo‘s $430 target is the only sub-consensus call on the tape and frames the bear case bluntly: even with a record backlog, paying 36x for a company whose earnings have historically swung 30% peak-to-trough is a stretch.
The split is the story — analysts are not arguing about whether Caterpillar’s data center business is real. They are arguing about what multiple a heavy-machinery stock should command for it.
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