Caterpillar shares rise as AI data centre demand surges

Caterpillar’s shares are beating rival Deere on the stock market, and CNBC’s Jim Cramer says the reason is clear: data centres. The heavy-machinery giant’s stock has jumped 101% over the past year and 40% so far in 2025, widening the gap with Deere, which has no direct role in supplying the power systems that tech giants need for AI factories.

Cramer highlighted the difference in a short tweet late last week, noting that Caterpillar’s exposure to data-centre power demand is the key driver. The company reported a $72.1 billion order backlog in its latest quarter, including $9.4 billion booked in just three months. “Power generation grew 72%,” CEO Jim Umpleby said on the earnings call, “driven by very strong demand for large generators and turbines used in data-centre applications.”

Investors are split. Bulls point to the order backlog and the 17% growth in the power business as proof that AI-related sales are durable. Bears, including investor Michael Burry, warn that Caterpillar’s valuation has soared to levels last seen three decades ago. Caterpillar now trades at a forward price-to-earnings ratio of 33 and a price-to-sales multiple of 5.4, well above Deere’s 25 and 3.5.

Hedge-fund data shows cautious optimism: 86 funds held Caterpillar in the fourth quarter of 2025, up slightly from 87 three months earlier, while Deere’s roster of backers stayed flat at around 60. Short interest is also higher for Deere, suggesting some investors see less risk in betting against the farm-equipment maker than Caterpillar. The coming quarters will show whether the AI power spigot keeps flowing—or starts to dry up.