Caterpillar (NYSE:CAT) reported its fourth-quarter earnings, delivering results that exceeded Wall Street expectations, primarily driven by surging power demand from the rapid expansion of artificial intelligence data centers, which boosted sales of the company’s power generation equipment.

According to the earnings report, fourth-quarter revenue reached USD 19.1 billion, representing a year-on-year increase of 17.9% and exceeding market expectations by USD 1.34 billion. Adjusted earnings per share for the quarter came in at USD 5.16, above the analyst consensus estimate of USD 4.69. Caterpillar’s Power & Energy segment posted a sharp 25% year-on-year increase in profit.

As one of the world’s leading manufacturers of mining and engineering machinery, Caterpillar has long been regarded as a global economic “barometer.” Today, its Power & Energy business is accelerating growth on the back of the AI data center construction boom. The company’s iconic yellow machines are present across industries and regions worldwide, and its sales performance often signals the strength of global industrial activity—or, at times, a slowdown in economic growth.

Following the earnings release, shares of the Irving, Texas–based Caterpillar (NYSE:CAT) rose nearly 7% at one point. As of the time of writing, the stock was up 1.58% in premarket trading.

The Power & Energy segment has become the company’s largest and fastest-growing business unit. Once a slower-growing part of Caterpillar’s overall operations, the segment now sells products including generators, diesel and natural gas engines, and industrial gas turbines, supplying power to construction sites, factories, and data centers.

In a market environment where investors are eager for AI-related plays after soaring valuations of major technology and semiconductor companies, this business has helped Caterpillar stand out as a clear winner. Fueled by optimism around data center–driven demand, Caterpillar’s market capitalization has surpassed USD 300 billion this month.