The accelerating hype behind artificial intelligence (AI) is perhaps matched only by the rapid growth in demand for the computing power and electricity required to run it all. The need for energy storage and electricity for AI data centers is expanding so rapidly that local power grids are having difficulties keeping pace.
That creates opportunity. Two companies that investors might not expect are capitalizing — and they offset some risk by having significant dividends: Caterpillar (CAT +3.87%) and Ford Motor Company (F +1.85%).
An AI play overlooked for decades
While most investors associate Caterpillar with construction and mining machinery, management sees a lucrative technology opportunity developing with AI: its potential to generate a new revenue stream at higher margins than its traditional business.
The company sells enormous engines, turbines, and generator sets that AI data centers use for both primary and continuous backup power, giving it a faster-growing revenue stream. As you can see in the graphic below, Wall Street has taken notice, and the stock has soared over the past year.
Today’s Change
(3.87%) $33.16
Current Price
$889.32
Key Data Points
Market Cap
$394B
Day’s Range
$870.61 – $895.15
52wk Range
$355.70 – $946.83
Volume
123.7K
Avg Vol
2.5M
Gross Margin
31.90%
Dividend Yield
0.71%
If you missed out on the one-year surge in Caterpillar shares, there is still growth to be had. “We think [this] is more of a 2027/2028 story than a 2025/2026 story,” Citigroup analyst Kyle Menges says, according to Barron’s.
What most investors probably aren’t aware of is that the company has an autonomous-mining fleet that’s one of the largest and most proven in the world. Management’s research on autonomous machines started decades ago, and now the company is taking it a step forward after unveiling multiple intelligent-product lines that will include autonomous excavators, loaders, hauling trucks, bulldozers, and compactors driven by a rise in AI.
Caterpillar is an intriguing mix of potential with its products becoming more powerful for its clients through AI and autonomy, while it also benefits from faster-growing segments due to increasing energy and storage demand.
The icing on the cake is that Caterpillar also offers investors safety: It has paid a cash dividend every year since it was formed, a quarterly dividend since 1933, and a higher annual dividend for 32 consecutive years.
Under the radar
Similar to Caterpillar, Ford’s most-hyped business right now has absolutely nothing to do with producing vehicles. Unbeknownst to many, Ford has spent most of the past year building the foundation for Ford Energy. Ford Energy is a wholly owned subsidiary of the company and will provide battery energy storage systems (BESS) for data centers and other large industrial customers in the U.S.
The Detroit automaker’s flagship product, named the Ford Energy DC block, is a 20-foot containerized BESS that comes in two configurations designed to provide its customers with predictable lifetime performance, from a company that is stable enough to assure that it will be around for servicing if necessary.
Image source: Ford Motor Company.
Ford plans to invest roughly $2 billion into its energy business initially, and after working quietly to build out its supply chains and manufacturing sites, it aims to start deliveries in late 2027. Morgan Stanley estimates Ford Energy could generate between $500 million to $600 million of run-rate earnings before interest and taxes at 20 gigawatt hours of production capacity.
Like Caterpillar, Ford offers a measure of safety with a dividend that sits at a 4% yield. And in recent years when cash flow is strong, it’s often boosted by a supplemental dividend.
Today’s Change
(1.85%) $0.27
Current Price
$14.56
Key Data Points
Market Cap
$57B
Day’s Range
$14.11 – $14.62
52wk Range
$10.38 – $17.78
Volume
728K
Avg Vol
57.9M
Gross Margin
7.81%
Dividend Yield
4.20%
What it all means
Besides rapidly changing the way many businesses operate, AI also offers opportunities for companies that can power its significant demand for energy and its storage. Investors could blindfold themselves and throw a dart and land on any number of projections that suggest the AI data center market and global power demand are expected to surge over the next decade.
And while many will continue to overlook Ford’s and Caterpillar’s ties to AI and energy, savvy investors understand their potential to generate new revenue streams, higher margins, and potentially better valuations.
