Investors who want exposure to the AI data-center buildout without owning chipmakers often turn to the companies that power and cool those facilities. On back-to-back days this week, two of the biggest names in that group got very different receptions.
On Wednesday, October 28, 2026, Vertiv jumped 16.86% after its orders more than doubled. On Thursday, October 29, Caterpillar fell sharply even though it reported the biggest sales quarter in its history. Both reports landed in a tense market. On October 28 the Federal Reserve held its benchmark rate at 3.75% to 4.00% in a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of a hike. Then Alphabet's revenue miss and negative free cash flow revived worries about AI spending.
Here is what separated the two reactions.
Vertiv Holdings (NYSE: VRT)
Vertiv makes the power management and thermal cooling equipment that keeps data centers running. Its October 28 report beat expectations by a wide margin. Third-quarter net sales rose 61% to $4.31 billion, ahead of estimates near $3.76 billion. Adjusted EPS climbed 78% to $2.21 against expectations of $1.82. Organic orders grew more than 100% from a year earlier. The adjusted operating margin widened 2.9 percentage points to 25.2%, and adjusted free cash flow rose 50% to $652.00 million.
Management raised full-year 2026 guidance across every key metric. Net sales are now expected at $14.45 billion to $14.85 billion, a $650.00 million increase at the $14.65 billion midpoint. Adjusted EPS guidance is $7.10 to $7.20. Fourth-quarter guidance calls for adjusted EPS of $2.22 to $2.28. Vertiv also plans to double its chiller production capacity by year-end and expects continued above-market organic growth in 2027.
The stock was up another 1.89% at $247.53 as of 2:10 p.m. ET on October 29, against a prior close of $242.94. That puts Vertiv's market value near $95.30 billion and its P/E at about 46.30. Even after this week's rally, the stock is 34.85% below its 52-week high of $379.94 and 67.45% above its low of $147.82.
Analysts responded quickly. TD Cowen raised its target to $357.00 and Wells Fargo raised its target to $345.00 on October 29. The average of six recent targets is $303.00, implying about 22.41% upside. The high target of $357.00 implies about 44.22%. GLJ Research remains the lone bear, with a Sell rating and a $188.00 target.
Caterpillar (NYSE: CAT)
Caterpillar's October 29 report looked strong on paper. Third-quarter sales and revenues rose 17% to a record $20.70 billion. Adjusted profit per share was $7.20, up from $4.95 a year earlier and ahead of the $7.03 consensus. The operating margin improved to 20.4% from 17.3%. Power-generation sales jumped 30% to $3.42 billion, driven mainly by turbines and large engines used in data centers. The order backlog hit a record of about $78.10 billion, nearly double its level a year earlier. The company also returned $2.00 billion to shareholders through buybacks and dividends.
The details disappointed investors. Revenue landed slightly below FactSet's consensus, and growth slowed from 24% in the second quarter. Caterpillar kept its full-year forecast for "mid-to-high teens" revenue growth, while analysts had been looking for about 18%. It guided only to "moderate" fourth-quarter sales growth, below the roughly 12% analysts expected. It still expects about $2.20 billion in tariff costs this year. Oppenheimer's Kristen Owen said the quality of the beat offered "a chink in the CAT armor," though she kept an Outperform rating and a $1,009.00 target.
Shares were down 9.47% at $645.84 as of 2:10 p.m. ET, against a prior close of $713.38. That puts Caterpillar's market value near $296.88 billion and its P/E at about 35.16. The stock is now 39.84% below its 52-week high of $1,073.46 and 20.25% above its low of $537.08. The average target of $929.80 implies about 43.97% upside, and Truist's $1,100.00 high target implies about 70.32%. Several firms trimmed targets before the report, including UBS, which cut its target to $750.00 from $925.00 on October 26.
Why the Split
Vertiv offered acceleration and raised guidance. Caterpillar delivered records but held its outlook steady. In a market already nervous about AI spending, steady growth was not enough to support a premium valuation.
What to Watch
Midterm elections take place November 3, 2026. With two Fed officials already voting for a hike, upcoming inflation data will shape expectations for the Fed's December meeting. For Vertiv, investors will want to see whether demand holds as it adds capacity. For Caterpillar, the next test is whether its record backlog turns into faster growth in 2027.
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