While Caterpillar Inc.'s (NYSE: CAT) power portfolio is in the "sweet spot" for on-site power for data centers, the company stands out as a "clear market leader" in terms of air permits, although there are some factors to consider, according to BofA Securities.
The Caterpillar Analyst: Analyst Michael Feniger reiterated a Buy rating and price target of $650.
The Caterpillar Thesis: Feniger said in the note that an air permit data analysis shows that:
- Caterpillar is the clear leader for backup power
- Diesel is still the primary source, versus natural gas
- Data centers are using turbines and reciprocating
While utility capex continues to be raised, data center build out continues to outpace power infrastructure, suggesting that the “bridge-to-grid” solutions offered by Caterpillar will remain in high demand 2026-2027, he added.
Caterpillar is more than doubling capacity, ramping to 50GW by 2030, which makes it important for the company to enter markets beyond data centers, Feniger said. "BofA sees more risk (down the road) on back up vs. prime," he further wrote.
CAT Price Action: Shares of Caterpillar had risen by 2.65% to $583.13 at the time of publication on Tuesday.
While **Caterpillar Inc.'s (NYSE: CAT)** power portfolio is in the "sweet spot" for on-site power for data centers, the company stands out as a "clear market leader" in terms of air permits, although there are some factors to consider, according to BofA Securities.
**The Caterpillar Analyst:** Analyst **Michael Feniger** reiterated a Buy rating and price target of $650.
**The Caterpillar** **Thesis:** Feniger said in the note that an air permit data analysis shows that:
- Caterpillar is the clear leader for backup power
- Diesel is still the primary source, versus natural gas
- Data centers are using turbines and reciprocating
While utility capex continues to be raised, data center build out continues to outpace power infrastructure, suggesting that the “bridge-to-grid” solutions offered by Caterpillar will remain in high demand 2026-2027, he added.
Caterpillar is more than doubling capacity, ramping to 50GW by 2030, which makes it important for the company to enter markets beyond data centers, Feniger said. "BofA sees more risk (down the road) on back up vs. prime," he further wrote.
**CAT Price Action:** Shares of Caterpillar had risen by 2.65% to $583.13 at the time of publication on Tuesday.
<p>While<strong> Caterpillar Inc.'s <a class="ticker-link" data-ticker="CAT" data-exchange="NYSE" href="https://www.benzinga.com/quote/CAT" target="_blank" rel="noopener">(NYSE:<a class="ticker" href="https://www.benzinga.com/quote/CAT">CAT</a>)</a> </strong>power portfolio is in the "sweet spot" for on-site power for data centers, the company stands out as a "clear market leader" in terms of air permits, although there are some factors to consider, according to BofA Securities.</p>
<p><strong> • CAT shares are trending higher. <a href="https://www.benzinga.com/quote/CAT" target="_blank" rel="noreferrer noopener">Stay ahead of the curve here.</a></strong></p>
<p><strong>The Caterpillar Analyst: </strong><a href="https://www.benzinga.com/analyst-stock-ratings/analyst/59d5294e6ab1240001266e62/michael-fenigerhttps:/www.benzinga.com/analyst-stock-ratings/analyst/59d5294e6ab1240001266e62/michael-feniger">Analyst<strong> Michael Feniger</strong></a> reiterated a Buy rating and price target of $650.</p>
<p><strong>The Caterpillar </strong><strong>Thesis: </strong>Feniger said in the note that an air permit data analysis shows that:</p>
<ul class="wp-block-list">
<li>Caterpillar is the clear leader for backup power</li>
<li>Diesel is still the primary source, versus natural gas</li>
<li>Data centers are using turbines and reciprocating</li>
</ul>
<p><strong>Check out <a href="https://www.benzinga.com/analyst-stock-ratings">other analyst stock ratings</a>.</strong></p>
<p>While utility capex continues to be raised, data center build out continues to outpace power infrastructure, suggesting that the “bridge-to-grid” solutions offered by Caterpillar will remain in high demand 2026-2027, he added.</p>
<p>Caterpillar is more than doubling capacity, ramping to 50GW by 2030, which makes it important for the company to enter markets beyond data centers, Feniger said. "BofA sees more risk (down the road) on back up vs. prime," he further wrote. </p>
<p><strong>CAT Price Action:</strong> Shares of Caterpillar had risen by 2.65% to $583.13 at the time of publication on Tuesday.</p>
<p><strong>Read More:</strong><a href="https://www.benzinga.com/trading-ideas/movers/25/10/48505570/wix-merchants-get-ai-shopping-boost-in-bold-new-paypal-partnership"> </a><br> • <a href="https://www.benzinga.com/trading-ideas/movers/25/10/48505570/wix-merchants-get-ai-shopping-boost-in-bold-new-paypal-partnership"><strong><u>Analyst Favors Caterpillar Over Deere As Machinery Markets Near Trough Levels</u></strong></a></p>
<p><em>Photo: DennisF via Shutterstock</em></p>