Caterpillar Inc. (NYSE:CAT) and General Electric Company (NYSE:GE) sit at the center of two converging demand waves. Caterpillar’s backup generators are being cited as essential for fast-growing data-center buildouts, while GE’s aerospace arm is posting double-digit revenue and EPS gains driven by rising aircraft activity and sensor demand. Near term, earnings and backlog updates will set market tone. Longer term, GCC infrastructure plans, LNG projects and AI-driven power needs create multi-year revenue pools for equipment and aerospace suppliers across the US, Europe and Asia.
The news matters now because quarterly reports and industry forecasts point to accelerating capital spending. Caterpillar faces a quarter where margins, backlog and the “AI power trade” could change investor expectations. GE has already reported strong top-line momentum — revenue +20.4% and EPS +38% year-over-year for the latest period — and that momentum feeds into supplier order books and component markets that are expanding globally.
Historically, Caterpillar often disappointed on earnings-day reactions. Jim Cramer’s recent remark — “In the Old Days, CAT Usually Went Down on Earnings, That’s Over” — signals a behavioral shift driven by new end markets like hyperscale data centers. Meanwhile, GCC forecasts and aircraft sensor market reports show structural growth beyond cyclical construction seasons. All this raises the stakes for the upcoming CAT quarter and for GE’s continued execution.
The headlines
Jim Cramer pushed Caterpillar (NYSE:CAT) into the spotlight by tying the company to the data-center supply chain. He emphasized backup generators that keep server farms running. That anecdote frames short-term demand drivers: data-center expansions and electrification projects that require standby and prime power equipment.
Regional infrastructure plans are also lifting demand. A GCC construction-equipment report pegs the market at 68,499 units in 2024 and projects 94,499 units by 2030, a compound annual growth rate of 5.51%. The report highlights urban master plans in the UAE and Saudi Vision 2030 as execution engines for earthmoving and heavy equipment sales. The report lists major manufacturers including Caterpillar, Komatsu Ltd. (TSE:6301) and Volvo Group (STO:VOLV-B) as key beneficiaries.
On the aerospace side, GE Aerospace reported robust growth: revenue up 20.4% and EPS up 38% year-over-year in the most recent quarter. Orders and aftermarket activity are fueling both near-term cash flow and longer-term backlog strength. Research into aircraft sensors expects the market to expand beyond $5.25 billion in 2025, reflecting demand for lighter, AI-enabled sensors in both commercial and defense applications.
Finally, corporate restructurings and portfolio moves matter. Eaton (NYSE:ETN) announced a spin-off of its Mobility group to focus on Electrical and Aerospace businesses. That move underscores how companies are repositioning to capture higher-growth segments such as electrical solutions for AI data centers.
Sector pulse
Three recurring themes define the current pulse: AI-driven power demand, infrastructure megaprojects, and aerospace aftermarket strength. AI and hyperscale data centers require unprecedented levels of reliable power. That boosts demand for large gensets, switchgear and uninterruptible power solutions. Caterpillar is a direct hardware supplier to that chain.
Infrastructure megaprojects in the GCC and other emerging markets are creating sustained demand for earthmoving machinery. The GCC forecast’s 5.51% CAGR to 2030 signals multi-year replacement and fleet-add cycles rather than a single-year bump. This supports higher utilization and pricing power for established OEMs.
In aerospace, fleet utilization recovery and defense spending lift aftermarket and sensor markets. GE Aerospace’s strong top-line growth combines new engine deliveries and maintenance, repair and overhaul work. Component makers and sub-suppliers that attach to this growth will see order books expand, and that provides a positive feedback loop into industrial suppliers of test, measurement and sensor technology.
Winners & laggards
Caterpillar (NYSE:CAT) — Opportunity: CAT benefits from both data-center generator demand and infrastructure spending. Backlog metrics and margin resilience will be decisive in the next earnings report. Risk: execution on margins if input costs or logistics worsen, and any softening in global construction capex could dent unit volumes. The GCC forecast suggests upside in regional unit sales; management commentary on backlog conversion rates will be critical.
General Electric (NYSE:GE) — Opportunity: GE Aerospace’s revenue +20.4% and EPS +38% show operational leverage. Robust orders and aftermarket growth underpin cash flow and justify continued investment in sensors and digital services. Risk: cyclical commercial airline demand and program timing can create lumpy earnings swings. Watch margin trends in aftermarket services and FCF conversion.
Eaton (NYSE:ETN) — Opportunity: the spin-off sharpens focus on electrical solutions for AI data centers and aerospace. That corporate action can unlock valuation re-rating if businesses trade at higher multiples independently. Risk: execution risks in separating businesses and short-term distraction for management.
Komatsu Ltd. (TSE:6301) and Volvo Group (STO:VOLV-B) — Opportunity: both stand to gain from the GCC equipment ramp. Risk: currency exposure and regional concentration risk depending on project awards and timing.
What smart money is watching next
- CAT Q4 earnings and guidance: Investors will parse backlog, gross- and operating-margin trends, and commentary on generator demand tied to data centers. Wall Street estimates for December 2025 quarter metrics will act as the benchmark for reaction.
- GE order intake and aftermarket growth metrics: Quarterly updates on orders, especially large engine packages and services backlog, will show whether the +20.4% revenue trend is sustainable.
- GCC project awards and LNG timelines: Contract wins or delays for infrastructure and LNG projects will change medium-term unit demand estimates — watch official awards and sovereign budget updates.
Closing take-away
The single most important insight: hardware suppliers where power, heavy equipment and aerospace meet the AI and infrastructure waves are moving from cyclical to structural growth pockets. Caterpillar’s positioning on data-center backup power and the GCC’s multi-year equipment demand, coupled with GE Aerospace’s strong order and revenue momentum, point to a period where execution and backlog conversion will determine winners. Near-term earnings and backlog disclosures will decide market sentiment, but the fundamental demand drivers are durable across regions.
