The Shift from Bulldozers to Megawatts

Caterpillar, widely known for its bulldozers and backhoes, is seeing its power generation business emerge as a critical profit center. According to a The Motley Fool analysis, the company's power and energy unit posted revenue of more than 2 billion last quarter, a 17% year-over-year increase, nearly matching construction-related sales of just over 3 billion. More notably, the unit's operating profit of a little more than $2 billion eclipsed construction's profit of just under $2 billion. The analysis attributes this growth to surging demand from data centers, which are turning to Caterpillar's conventional combustion generators and natural gas turbines for auxiliary and primary power as they grapple with electricity shortages.

This shift is also reshaping how investors value the company. Caterpillar shares have risen nearly 90% over the past 12 months, according to the same analysis, and now trade at a forward price/earnings ratio of a little more than 30 — a premium to Microsoft, Alphabet, and Nvidia. The company's order backlog stands at $72 billion, up 92% year over year for the three months ending in June. While the analyst consensus price target of 21 sits more than 20% above the current price of 25, the stock's valuation remains a point of caution for some investors.

Bloom Energy's Accelerating Growth

Bloom Energy, a hydrogen fuel cell manufacturer, is experiencing a similar surge in demand tied to AI infrastructure. The company reported its first billion-dollar quarter on 28 July, with Q2 revenue of 065 billion, and raised its full-year revenue guidance for the second consecutive time to 9 2 billion. A Seeking Alpha analysis notes that the company's 2026 revenue midpoint now stands at 05 billion, 6% above where management started the year. Quarterly revenue growth has accelerated from 130% year over year in Q1 to 5% in Q2.

According to that analysis, Bloom's short order-to-revenue cycle is a key driver, allowing it to quickly convert demand into sales. The company has secured a deal with Oracle for 2 gigawatts of capacity, with the agreement supporting up to 8 gigawatts. This exceeds Bloom's disclosed 1 gigawatt of Fremont capacity, though expansion to 2 gigawatts is ongoing. The same analysis suggests Bloom's competitive advantage lies in its ability to provide cleaner onsite generation, which helps hyperscalers and neoclouds address permitting, emissions, and grid-upgrade costs more effectively than competitors like GE Vernova and Caterpillar.

The Backlog Question

Despite the growth, some investors remain cautious about Bloom Energy's valuation and business mix. A The Motley Fool analysis points out that Bloom only reports its backlog once a year, but management indicated on its Q2 2026 conference call that it has material new customers not yet reflected in the numbers provided at the start of the year. The product backlog was 5 times larger at the start of 2026 than it was at the start of 2025, but it accounted for only $6 billion of the company's $20 billion total backlog. The remainder is tied to service contracts, which the analysis describes as an annuity-like income stream that could eventually support a reliable dividend.

While fuel cell sales drive current growth, the analysis suggests the service contracts may be the more significant long-term opportunity. However, the author of that analysis states they are not yet willing to buy Bloom Energy, citing valuation concerns. The company's market cap is $62 billion, with a 52-week range of 87 to 28.

Market Performance Comparison

Both companies are capitalizing on the same underlying trend: the electric grid's inability to keep pace with AI-driven demand. Caterpillar's power and energy unit is now a profit leader, while Bloom Energy is scaling rapidly to meet demand for off-grid power solutions. As the Seeking Alpha analysis notes, Bloom's fuel cells can provide power without waiting for utility grid connections, a critical advantage for data centers seeking to come online quickly.

Investor sentiment is mixed. While Caterpillar's growth is seen as a positive re-rating, its valuation multiple has become a point of debate. Bloom Energy's rapid growth is notable, but the composition of its backlog and its high valuation temper enthusiasm. As the AI infrastructure buildout continues, both companies are likely to remain at the center of the power supply conversation.