Nvidia boss Jensen Huang didn’t play hard to get when Donald Trump slipped him a late invite on Monday evening to join him and an entourage of chief executives on his state visit to China. Having spent the better part of a year working every angle in Washington and Beijing trying to get the green light for Nvidia to sell its artificial intelligence (AI) chips into China, this presented a real chance to bend some ears. For Nvidia sits at the centre of a US-China tech war. While Trump eased restrictions last year to allow the group to flog some older AI chips – on condition the US government gets a cut of sales – Beijing still hasn’t given local companies the nod to buy them.Securing the last seat on Air Force One – after Huang dashed to Alaska on Tuesday to board the plane as it was on a layover – helped Nvidia shares sustain a seven-week rally before a pause for breath on Friday. It follows a long stretch from last autumn where they drifted sideways amid persistent concerns about an AI bubble. Nvidia shares are now up more than 70 per cent over the past year, with its market capitalisation breaching $5.5 trillion (€4.7 trillion) for the first time on Wednesday. That’s left it $1.1 trillion above Apple, the world’s second-most-valuable company, which has jumped more than 40 per cent. [ Xi Jinping tells US chief executives that China will ‘open wider’Opens in new window ]But the standout AI play within the Dow Jones Industrial Average over the past 12 months is a 101-year-old company best known for its yellow bulldozers and excavators. Caterpillar has soared as much as 167 per cent – making it by far the best performer on the index – to almost $430 billion. Its business building power-generation equipment for data centres has attracted investors ravenous for secondary AI plays, after valuations of significant technology and semiconductor companies started looking a tad stretched. The group lifted its annual and long-term revenue outlook a few weeks ago, pointing to an AI-driven surge in data centre construction that has swollen demand for its power-generation and backup systems to record levels. Group sales jumped 22 per cent in the first quarter to $14.2 billion, while net profits rose 27 per cent to $2.5 billion. The result is even more impressive given that Caterpillar expects the impact of import tariffs to amount to as much as $2.4 billion this year, up $600 million on the hit last year. Its two largest divisions – power and energy and construction industries – have seen sales accelerate in recent years as big technology firms pour billions into data centres and supporting infrastructure in the global AI arms race. The power and energy unit is now its biggest revenue generator. [ Technology stocks lift equity indexes around the worldOpens in new window ]It’s no metamorphosis. Caterpillar has been building large-scale standby and prime power generators since the 1960s – although the market only started to appreciate the company’s AI exposure in April last year, just as the group turned 100. Investors latched on to a nugget in its quarterly report at the time that sales in its power generation business were soaring with the data centre boom. This was otherwise masked by the fact that the business was housed at the time in a division then known as energy and transportation, where overall revenues were just about holding their own. Power generation sales were already a bright spot in Caterpillar’s full-year 2024 results, but this was lost on a market more concerned by a dip in overall group revenues. “Caterpillar’s power generation business has been a particular bright spot in recent years, growing at about 22 per cent annually over the past three years,” said RBC Capital Markets analyst Sabahat Khan in a recent report. “Growth has largely been driven by the data centre buildout, which we believe is likely to continue supporting [double-digit percentage] growth in this business line over the coming years.”Could we be heading toward a world recession if Trump can’t broker a deal with Iran? Listen | 34:04A glance at the 2024 results for the Irish unit of Finning, the world’s largest Caterpillar dealer and sole authorised distributor in the Republic, shows that its revenues jumped by 65 per cent to more than €136 million, driven by the delivery and installation of engines for power generation in a range of industries and market sectors.Caterpillar has had a treasury unit based in Dublin for the past three decades, used to issue debt and provide loans to the wider group to fund customer leasing and hire-purchase agreements. This business had just under €340 million of retained earnings at the end of 2024. [ Intel shares jump 20% as it predicts revenue surge from AI data centresOpens in new window ]Number crunchers at Bernstein, led by Chad Dillard, say Caterpillar’s new outlook for the power generation business points to its sales growing at an average 18 per cent a year out to 2030 – double what was previously expected. Caterpillar exited the first quarter with a record $62.7 billion order book, up almost 80 per cent on the previous year, driven by the power and energy business. But activity in its construction equipment business is also rebounding strongly, while orders for its mining equipment are at the highest level since 2012, buoyed as gold and copper prices have hit record levels. But it’s the AI theme that has helped Caterpillar shares bulldoze out their normal trading range into fresh ground. They are changing hands at almost 40 times consensus earnings per share estimates for this year, double their historic average.The wider US S&P 500 industrials sector index is trading on a little over 30 times earnings – though this is skewed by Caterpillar being its biggest component. Caterpillar came last week to within 2 per cent of the average share price target of $948 set by analysts, though it has since come back a bit. However, HSBC’s Helen Fang has become one of the most bullish on the company, raising her price target to $1,100 – suggesting the darling of the Dow still has about 20 per cent more to go. But the lifting might get heavier from here.