The caret (^) symbol usually stands for exponentiation in Microsoft Excel. Exponentiation is a mathematical operation that raises the quantity to a power. It is the second precedence in the Order of Operations. The caret is also used in a function that returns formatting information or it may appear in a converted spreadsheet.
Exponentiation

Formulas use exponents to represent multiplying a number by itself, for a set number of times. For example, 555*5 = 5^4. The base of the formula is the number 5. The number 4 is how many times the formula needs to multiply the results by 5. The expression is pronounced "5 to the power of 4 equals 625."
PEMDAS

The order of operations, otherwise known as "Please excuse my dear Aunt Sally" controls the order that mathematical operations occur. Any part of the formula that is enclosed in parenthesis is calculated first. The next step of PEMDAS is exponentiation, represented by the caret (^). Then Excel calculates multiplication (*) and division (/). The final operations that are calculated are addition (+) and subtraction (). If the formula contains multiple operators with the same precedence, Excel calculates those from left to right.
CELL Function

The CELL function returns information about cell formatting. The function syntax is "=CELL("info_type", reference)." "Info_type" is a required value that tells Excel what type of information you want returned and "Reference" is the cell that is being evaluated. To return the cell text alignment, your formula would look like "=CELL("prefix", A1)." This would return information about the cell alignment. When the text in the reference cell is centered, a caret is displayed.
Converted Lotus 123 Worksheet

You may see a ^ in the Formula Bar if you open a Lotus 123 spreadsheet. Lotus 123 uses special characters to indicate formatting. These characters appear in Excel's Formula Bar; however, they do not affect the cell. The characters are the apostrophe ('), which means the text is leftaligned, the quotation mark (") for rightaligned text, the caret (^) for centered text and the backslash () for justified text.