Why Caterpillar Could Be the AI Stock of the Year
Key Points
Caterpillar's revenue jumped 22% in the first quarter of 2026 compared to the year prior.
The construction equipment and machinery company's backlog is at a record high.
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When you think of artificial intelligence (AI) stocks, the construction equipment and machinery company Caterpillar (NYSE: CAT) is probably not the first business that comes to mind. It's an old-school value investment, not a high-octane growth stock. However, there's immense demand for data centers, and someone has to build them. That's where Caterpillar comes in -- and it could potentially be the best stock of the year.
The century-old construction equipment manufacturer has become one of the most compelling investments in the AI physical infrastructure build-out as its stock has surged more than 170% over the past 12 months.
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From excavation to land clearing and the actual building of facilities, every hyperscaler, including Amazon, Alphabet, and Microsoft, needs Caterpillar's products to meet their AI infrastructure requirements. This equates to billions in spending from deep-pocketed tech giants, and Caterpillar will be there to answer the call.
Image source: Getty Images.
Caterpillar is one of the few companies with the size and scale to handle this level of demand. The company released its first-quarter earnings on April 30 and reported a huge 22% increase in revenue from Q1 2025, reaching $17.4 billion.
Adjusted profit per share also jumped from $4.25 to $5.54 year over year. Caterpillar boasts a record backlog, which means increased revenue visibility for the foreseeable future.
The AI revolution is nothing without the industrial companies like Caterpillar that will build the necessary data centers. While semiconductors and cloud computing get all the buzzworthy headlines, Caterpillar may actually be the smartest and most overlooked AI play today.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Caterpillar, and Microsoft. The Motley Fool has a disclosure policy.
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