Caterpillar's Power Generation Business Is Nearly as Big as Its Construction Segment. Here's What That Shift Means for the Stock's Multiple

Caterpillar's power generation unit has become nearly as large as its construction segment, driven by AI data center demand for generators and turbines. The power and energy division generated $8.2B in revenue with $2B in operating profit last quarter, exceeding construction metrics. With a $72B order backlog growing 92% YoY, the company is being valued like an AI infrastructure beneficiary at a forward P/E of 30+, though analysts see further upside potential.