Caterpillar (CAT) has raised its targets for the 2024 to 2030 period for revenue, profit margin, and capital expenditures, the company said in a presentation for its Investor Day on Tuesday.
The industrial giant is looking to raise the compound annual growth rate (CAGR) for its sales and revenues from 4% in 2024 to 5%-7% through 2030, while bringing its services revenues up to $30 billion per year from $24 billion in 2024.
The company is also raising its adjusted operating profit margin target from a range of 18% to 22% at $72 billion of sales and revenues to 21% to 25% at $100 billion, according to the investor presentation.
Shares in Caterpillar, down 3% through Tuesday morning trading, remain up by more than 70% over the past six months as the company has seen demand for machinery to power AI data centers explode.
On the back of that growth, the industrial company is looking to double its capital expenditures for machines, power, and energy, and more than double its capacity for gas turbines, which are crucial to the natural gas plants that are becoming an increasingly go-to source of energy for data center developers.
Caterpillar reported in its third quarter earnings release that power generation machinery brought in the biggest sales jump of the quarter, with demand for reciprocating engines up by 33% year-on-year.
“I think we’re at the early stages of the prime power opportunities, so we’re excited to have more of those come online,” CEO Joe Creed said on the earnings call. “So we have great confidence in the pipeline that’s out there, and that’s why we’re putting the capacity in, and we continue to raise the capacity.”
The Industrials (XLI) sector as a whole is up roughly 15% on the year, just below the S&P 500’s (^GSPC) 15.7% rise, for which the AI boom is also largely responsible.
Fellow industrial giant Honeywell (HON) also cited demand for data centers as a bright spot on a strong third quarter earnings print last week.