Al Root

The incredible momentum in Caterpillar stock looks set to continue with a new analyst price target that is the second-highest on Wall Street.

Shares of the heavy machinery maker were up 0.7% at $773.93 in premarket trading Wednesday, while S&P 500 and Dow Jones Industrial Average futures were both up about 0.3%.

The move came after Wells Fargo analyst Jerry Revich increased his price target to $870 a share from $756. That's the second-highest on Wall Street, according to FactSet, behind Evercore ISI analyst David Raso's $878 price target. Both analysts rate the stock Buy.

AI is partly behind the move, but not in the way that has helped Caterpillar shares lately. Revich increased his estimates for U.S. non-residential construction, citing "an acceleration in power and data center" building, among other factors.

Data centers have helped Caterpillar out in other ways lately. Its power generation business is growing, partly driven by the power needs of AI data centers.

Cat's power business is part of its Power and Energy segment that generated fourth-quarter 2025 sales of $9.4 billion, up 23% year over year. The company's total fourth-quarter sales were $19.1 billion, up 18% year over year.

More growth is ahead. JPMorgan analyst Tami Zakaria sees "double-digit percent annual sales" growth for Power and Energy between 2026 and 2028. She rates Cat stock Buy, too, and has a $765 price target for shares.

That's a little below where shares are trading, but analysts have had trouble keeping up with the stock lately. Coming into Wednesday trading, Caterpillar stock was up 34% this year and up 124% over the past 12 months.

Many industrial stocks have soared as AI fears have pushed investors out of software and into companies that make physical products, which are tougher for AI to disrupt. Coming into Wednesday trading, the State Street SPDR S&P Software & Services ETF was down 22% this year.

The average analyst price target for Cat stock is about $728, up from $392 a year ago. Analysts have hiked their price targets, just not enough.

Overall, 50% of analysts covering Caterpillar stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.

Write to Al Root at allen.root@dowjones.com

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February 25, 2026 08:12 ET (13:12 GMT)

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