Is Caterpillar Set to Transform On-Site Energy for Data Centers?

Caterpillar Inc. CAT and Vertiv VRT have entered into an agreement to develop advanced energy optimization solutions for data centers. This collaboration focuses on integrating Vertiv's power distribution and cooling portfolio with Caterpillar’s know-how in power generation and CCHP (Combined Cooling, Heat and Power). This partnership aims to capitalize on the surging need for on-site energy systems that deliver reliable, efficient power and cooling. Caterpillar and Vertiv will deliver pre-designed architectures that simplify deployment, shorten time-to-power and enhance data center performance. Caterpillar and its subsidiary Solar Turbines will supply power generation solutions, such as natural gas turbines and reciprocating engines that will deliver dependable, scalable electric power and thermal energy for CCHP. Vertiv offers a complete portfolio of power and cooling solutions and services, packaged as modular, pre-designed blocks, to shorten design cycles and standardize deployment. Over the years, Vertiv has carved a niche as a specialist in critical digital infrastructure. The company provides integrated solutions spanning power management, thermal management and IT management systems. With AI-driven workload surging day by day, the need for robust, scalable power and cooling infrastructure has intensified. The Caterpillar and Vertiv collaboration will address the demand for on-site energy solutions and offer a coordinated, customer-first approach to solution design and implementation.In August, Caterpillar entered into a long-term strategic collaboration with Hunt Energy Company to meet the surging power needs of data centers. With the sector demanding uninterrupted or “always on” energy, the partnership aims to deliver scalable, efficient and highly reliable solutions tailored for data center operations. The partnership brings together more than 190 years of combined industry experience, leveraging Hunt’s proven expertise in energy infrastructure and Caterpillar’s leadership in power systems.Caterpillar’s diverse portfolio in power solutions includes natural gas and diesel generation equipment, gas turbines, switchgear, controls, aftertreatment and engineering design services. CAT will also provide leading-edge monitoring and servicing capabilities to ensure uninterrupted power delivery, with or without a connection to the power grid.Another company which stands to benefit from the rapid expansion of AI data centers is Eaton Corporation plc ETN. Eaton is a diversified power management company and a global technology leader in electrical components and systems.Eaton has invested more than $8 billion in transformative portfolio management and will be able to focus on the remaining businesses that will allow it to further improve earnings in the long run. Eaton completed the acquisition of Fibrebond for $1.4 billion, enhancing its ability to serve data center, industrial, utility and communications customers.Caterpillar's Price Performance, Valuation & EstimatesCAT shares have gained 50.7% so far this year compared  with the industry’s 15.2% growth. Image Source: Zacks Investment ResearchCaterpillar is currently trading at a forward 12-month price/earnings (P/E) ratio of 25.96X compared with the industry average of 24.75X.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for CAT’s 2025 earnings indicates a year-over-year decline of 16%.  The earnings estimate for 2026 indicates 18.8% growth. Both the earnings estimates for Caterpillar for 2025 and 2026 have moved up, as shown in the chart below.Image Source: Zacks Investment ResearchCaterpillar stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Caterpillar Inc. (CAT): Free Stock Analysis Report Eaton Corporation, PLC (ETN): Free Stock Analysis Report Vertiv Holdings Co. (VRT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks