Caterpillar's power generation arm nearly rivals its construction business

Caterpillar has long been known primarily for construction and mining machinery, but surging demand for backup generators and power systems tied to the AI-driven data center boom has reshaped its business mix. The company's Energy & Transportation segment has nearly caught up with the construction division in revenue and continues to outgrow the rest of the business. Analysts note the market still prices Caterpillar as a cyclical industrial name with a modest multiple, while power infrastructure businesses tied to AI and electricity demand typically command richer valuations. If the trend holds, investors may need to revalue the stock higher as the share of faster-growing, higher-margin revenue keeps expanding. For retail investors, it's a case study in how the AI and data center boom is reshaping even old economy industrial giants.