September 23, 2026 - Caterpillar Inc. CAT and Komatsu Ltd. KMTUY are among the world's leading manufacturers of construction and mining equipment. Caterpillar ranks as the industry leader, with Komatsu close behind. Both companies have a strong global presence and serve diverse end markets, including infrastructure, construction, mining, oil and gas and industrial applications.

Illinois-based Caterpillar has a market capitalization of $375 billion, whereas Tokyo, Japan-based Komatsu has a market capitalization of around $40 billion. Around 80% of KMTUY's revenues are generated outside of Japan, underscoring its strong international presence.

Both are closely watched by investors to gauge the health of the broader manufacturing and infrastructure landscape, especially during periods of economic uncertainty. The question is which stock you should put your money on. To find out, let us dive into the fundamentals, growth prospects and challenges of both Caterpillar and Komatsu.

The Case for Caterpillar

Caterpillar has delivered positive revenue growth over the past four quarters and earnings growth in the past three. In the second quarter of 2026, revenues gained 24% year over year to $20.5 billion, driven by higher sales volumes across its businesses. Adjusted earnings per share surged 73% to a record $8.17. Sales exceeded $20 billion for the first time in Caterpillar's history and backlog reached a record $72 billion.

Backed by this performance and upbeat volume expectations across its primary segments, Caterpillar now expects 2026 sales and revenues to increase in the mid-to-high teens, up from its previous low-double-digit growth forecast. The company stated that 59% of its $72 billion backlog is expected to be delivered over the next 12 months. The ratio has remained relatively stable over the past three quarters, underscoring continued demand momentum.

Full-year Machinery, Power & Energy (MP&E) free cash flow is expected to land in the upper half of the company's $6-$15 billion target range.

Caterpillar also has several secular growth opportunities, including U.S. infrastructure spending, mining demand associated with the energy transition, automation, data center expansion and investments in sustainability.

To capitalize on rising power-generation and oil-and-gas demand, CAT will restart production of its 10-megawatt gas engine platform, which was discontinued in 2022. It plans to bring about 1.5 gigawatts of capacity back online, with shipments to begin in the fourth quarter. It is also expanding turbine capacity and has repurposed a 250,000-square-foot facility in Wamego, KS.

At the same time, Caterpillar continues to invest in services, e-commerce, sustainability, electrification and digital initiatives. The company expects service revenues to increase from $24 billion in 2025 to $30 billion by 2030, providing a growing source of recurring and potentially higher-margin revenues.

The Case for Komatsu

KMTUY's revenues in the first quarter of fiscal 2026 (ended June 30, 2026) increased 14.7% year over year to JPY 1.043 billion ($6.545 billion). Construction, Mining & Utility Equipment sales increased 14.4% and Industrial Machinery & Others sales rose 21.7%. The company reported earnings per share of 67 cents, which were down 3% year over year. Although Komatsu has been delivering sales growth in the last three quarters, earnings continue to remain under pressure.

For fiscal 2026, Komatsu expects net sales to increase 4.1%. Construction, Mining & Utility Equipment sales are projected to rise 4.3% on higher sales volume and improved selling prices. Industrial Machinery & Others sales will increase 5.5% year on year. While sales to the automotive industry are expected to decrease, mainly due to lower sales of large presses, sales to the semiconductor industry are projected to increase, supported by customers' increased production.

Komatsu also faces greater exposure to U.S. tariffs. Around 50% of the products it sells in the United States are imported, mainly from Japan and China. The company expects tariff-related cost increases to have an annual negative impact of JPY 37.8 billion ($0.24 billion). Komatsu expects operating income to decrease 2.2% and net income to decrease 7.3% in fiscal 2026.

Komatsu has nevertheless been strengthening its North American operations. Over the past decade, it has invested more than $5 billion in the region by adding companies to the Komatsu group and has invested more than $650 million in North American infrastructure to upgrade facilities and enhance operational capabilities. Its acquisition of remanufacturing specialist SRC of Lexington, Inc. should further strengthen its remanufacturing capabilities in North America and position the company to benefit from demand for remanufactured components.

Over the long term, Komatsu remains well-positioned due to its focus on technological innovation, automation and portfolio expansion. It is accelerating the next generation of autonomous mining equipment through the advancement of a software-defined vehicle strategy. Aftermarket business sales account for about 50% of sales in construction, mining and utility equipment and around two-thirds of mining equipment revenues. The company plans to build its aftermarket business alongside new equipment sales and establish a profit structure less vulnerable to fluctuations in demand for new equipment.