How Caterpillar Stock Gained 120%
Over the year-long stretch ending February 11, 2026, Caterpillar (CAT) rode a wave of record sales and a booming AI-driven market, pushing shares up over 16%. Yet, despite this surge amidst tariff pressures and a slight earnings dip, signs of an overbought rally hint at a possible pullback ahead.
Below is an analytical breakdown of stock movement into key contributing metrics.
| 2112025 | 2112026 | Change | |
|---|---|---|---|
| Stock Price ($) | 357.3 | 775.0 | 116.9% |
| Total Revenues ($ Mil) | 65,664.0 | 64,671.0 | -1.5% |
| Net Income Margin (%) | 16.3% | 14.3% | -11.8% |
| P/E Multiple | 16.2 | 39.2 | 141.7% |
| Shares Outstanding (Mil) | 484.2 | 468.6 | 3.3% |
| Cumulative Contribution | 116.9% |
So what is happening here? Despite a slight dip in revenues and tighter margins, the stock price surged over 16% driven by a sharp jump in the P/E multiple and a modest reduction in shares outstanding.
Here Is Why Caterpillar Stock Moved
- Record Sales & Backlog Growth: Full-year 2025 sales reached a record $67.6 billion, up 4% from 2024, with Q4 2025 sales up 18%. Record $51 billion backlog (Q4 2025) indicates strong future demand.
- AI/Data Center Demand Surge: Energy & Transportation segment saw increased sales, driven by robust demand for power generation engines supporting AI data center build-outs.
- Advanced Technology Adoption: Debut of AI-powered autonomous equipment and a virtual Cat AI Assistant at CES 2026 signifies strategic shift towards automation.
- Shareholder Capital Return: Caterpillar deployed $7.9 billion for share repurchases and dividends in 2025, supported by $11.7 billion in operating cash flow.
- Overbought/Tariff Impact: Stock gained 113.44% to all-time highs by Feb 11, 2026. However, overbought RSI (73.61) suggests potential for near-term pullback despite 2025 tariff headwinds of $1.5B-$1.8B.
Current Assesment Of CAT Stock
The core investment debate is centered around: Can the massive $51B backlog and secular AI-driven Power & Energy growth offset the cyclical slowdown risks and immediate margin compression from tariffs and manufacturing costs?
The prevailing sentiment appears to be neutral. The undeniable strength in the backlog and AI-related orders is being fully offset by tangible margin compression from tariffs. This conflict, plus an erratic forecasting record, mutes conviction.
| Bull View | Bear View |
|---|---|
| Record $51B backlog and accelerating Power & Energy demand for AI data centers provides a durable bridge over any cyclical weakness, ensuring strong future revenue. | Adjusted operating margin fell 270 bps YoY in Q4 2025 to 15.6%. This margin squeeze from tariffs is structural and will erode profitability despite backlog strength. |
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