Caterpillar gains buy rating as AI data center power demand boosts engine sales.

Jim Cramer endorsed Caterpillar as a buy, highlighting three growth drivers: AI hyperscalers needing industrial engines for data center power, rising oil and gas activity, and strong infrastructure demand. Caterpillar's Power Generation revenue surged 41% in Q1 2026, driven by engines supporting data centers. Construction and Oil & Gas segments also showed strong revenue growth, supported by high oil prices and infrastructure spending. Risks include tariffs impacting Resource Industries and dealer inventory fluctuations. Caterpillar shares have risen 60% year-to-date, with analysts mostly bullish but cautious about tariff and inventory risks. Investors should consider the stock if they believe AI power demand and infrastructure spending will continue to grow through 2027.