Caterpillar's Key Stock Score Surges 22 Points As Record Earnings, AI Data Center Demand Drive Massive Backlog

Caterpillar Inc. (NYSE:CAT) has demonstrated remarkable operational resilience, evidenced by a significant leap in its proprietary financial health metrics led by its Benzinga Edge Stock Rankings‘ quality score.

What Does The Quality Score Surge Mean?

The company's quality score—a composite ranking of operational efficiency and fundamental strength—surged from a percentile rank of 53.13 to 75.30 over the past week.

This 22-point jump comes on the heels of a record-breaking fourth-quarter earnings report that saw the machinery giant overcome substantial macroeconomic pressures.

CAT maintains a stronger price trend over the short, medium, and long terms with a poor value ranking, as per Benzinga Edge Stock Rankings.

Navigating Tariff Pressures And Profitability

The sharp rise in Caterpillar’s quality ranking is particularly notable given the “manufacturing headwinds” cited by management. During the fourth quarter of 2025, Caterpillar faced approximately $1.7 billion in net incremental costs, primarily driven by higher tariffs.

These costs, alongside restructuring charges in the Rail division, pressured GAAP profit margins, which fell to 13.9% from 18.0% in the prior year.

However, the company's ability to maintain an adjusted operating profit margin of 17.2% for the full year suggests a disciplined execution that investors have rewarded with a higher quality percentile.

Record Backlog And Data Center Demand

Fueling this efficiency is a historic demand for Caterpillar equipment. The company reported a record backlog of $51 billion, a 71% increase year-over-year.

Much of this momentum is anchored in the Power & Energy segment, which saw sales climb 23% in the fourth quarter.

The segment is benefiting from a “surging” need for power-generation equipment to support AI-driven data centers, including a massive 2 GW order for reciprocating generator sets.

Robust Cash Position And Shareholder Returns

Caterpillar's financial health is further fortified by its liquidity and commitment to capital returns. The firm ended 2025 with $10 billion in enterprise cash and generated $11.7 billion in operating cash flow.

In a show of confidence in its long-term trajectory, management deployed $7.9 billion toward dividends and share repurchases during the year.

CAT Outperforms In 2026

Shares of CAT have advanced by 15.61% year-to-date, while the S&P 500 has only gained 0.35% in the same period. It was up 59.32% over the last six months and 92.79% over the year.

On Wednesday, the stock closed 1.57% lower at $691.82 per share, and it was up 0.098% in premarket on Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image via Shutterstock