US Machinery: CAT & CMI Data Center Note 2: Digging into Supply/Demand

Research evidence excerpt

US Machinery: CAT & CMI Data Center Note 2: Digging into Supply/Demand

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24 Jun 2026 04:00:00 ET │ 21 pages

US Machinery

CAT & CMI Data Center Note 2: Digging into Supply/Demand

CITI'S TAKE

Kyle Menges AC

In the second of our multi-note series on CAT’s and CMI’s data center +1-212-816-1817

businesses (note 1 here), we dig into the data center supply/demand outlook kyle.menges@citi.com

for onsite backup and prime power. With a significant capacity buildout

expected across the industry through 2030+, we have observed a growing Randy Marker

debate around whether there will be enough incremental demand to satisfy +1-212-816-3537

that supply. Overall, we see little risk of industry oversupply through 2030 randy.marker@citi.com

for both onsite backup and prime power. Using what we deem as our most

realistic assumptions for what industry capacity utilization could look like,

we believe the industry supply/demand dynamics could start to loosen in

the early 2030s. As a result of this analysis, our CAT and CMI data center

revenue estimates for 2026-2030 are little changed, although we have

brought down our 2031-2040 estimates as the industry supply/demand

looks more challenged than we initially thought in those years.

Supply vs Demand Conclusion — Our modeling of global demand and supply for

global data center onsite prime power and backup power suggests (if we simply

assume 100% capacity utilization) that backup power supply would exceed demand

by YE27, and onsite prime power supply would exceed demand by YE29. We do think

100% capacity utilization is unrealistic, however. Therefore, after making more

reasonable utilization assumptions, we estimate backup power industry capacity

utilization could remain at healthy levels (+75%) through 2032 to meet our