Caterpillar: how the US machinery giant harnesses Ai and soars in the stock market

Finally: the American company invests in site automation and the integration of intelligent driver assistance systems to reduce fuel consumption, improve precision of operations and support an increasingly scarce workforce. In short: Ai is present in the business model.

With this in mind, Caterpillar - here the topic of data centres is not temporary - wants to increasingly orient its Power & Energy division towards the energy demand required to operate data centres. The Investor Day presentation estimates that the demand for MW for data centres globally will rise twofold by 2035. Well: Caterpillar expects the production capacity of large engines and gas turbines to be doubled and increased to 2.5 times by 2024, respectively. All to more than double Power Generation sales by 2030.

So far, some suggestions on Artificial Intelligence and Energy & Transportation. There are, however, further business areas. Among others: the so-called Construction Industries. That is: construction machinery and infrastructure. The division closed the third quarter of 2025 with revenues up (+7%) and operating profit down to 1.37 billion. The accounting dynamic is - more or less - replicated in the Resource industries. That is to say: the segment to which machines and solutions for mining, quarries and large industrial works belong (from mining trucks to large loaders up to drilling machines and fleet management technologies). In this segment, turnover - again in the third quarter - increased by 2%, while operating profit fell by 19%. These are trends in two important areas for Caterpillar, both of which have - among the various reasons for the slowdown in profitability - a common cause: the impact of the tariffs wanted by Donald Trump. The company - in general and beyond the individual divisions - reported, between the beginning of July and the end of September 2025, a negative impact of 686 million for so-called production costs. Increased charges, a large part of which are due to the entry into force of tariffs. So much so that the group - as of today and without considering the possible intervention of the Supreme Court - expects the weight of the tariffs on the entire 2025 to be estimated between 1.6 and 1.75 billion, net of actions to reduce the impact of the same tariffs and cost controls.

Finally, going back to the individual business areas, there is the Financial product segment. That is: the financial division that offers leasing, loans, insurance solutions and risk management to customers and dealers. It is very relevant because, on the one hand, many customers only buy machines if they can access leasing, loans and insurance coverage. And on the other hand, because it generates stable financial revenues, strengthening - then - the relationship between the company and the users. Well: in the last quarter the area in question saw revenues rise (+4%) and operating profitability fall (-2%). The trend is confirmed over the nine months, but with profits falling the most compared to the same period in 2024. To put it differently: the third quarter went reasonably well, while between the beginning of the year and the end of September, the long wave of increased credit risk was felt.

In such a context, then, what are the market dynamics and multiples of Caterpillar? With regard to stock market performance, it should be noted that - along with other companies active in power generation - the stock rose in 2025 also, and above all, in the wake of the artificial intelligence (Ai) narrative and the demand for the energy needed to run data centres for Ai itself.

Beyond that, Seeking Alpha puts the current and projected 2025 non-GAAP price-to-earnings ratios at 28.6 and 29.4 times, respectively. In general, these are not high indicators, but - Seeking Alpha points out - they remain well above the median of the reference segment. On closer inspection, the same non-GAAP PEG over 3-5 years is much higher when compared to that of the comparison sector. In other words: the stock is expensive and the do-it-yourselfer has an obligation to take this into account.

On the contrary, however, the momentum,' says Seeking Alpha, 'is excellent: the stock's performance over the past year' is greater than that of the S&P 500, 'indicating investor confidence and positive sentiment'. In short: Caterpillar, which has an articulate but typically cyclical business, has taken advantage of - and is taking advantage of - the Ai revolution. How much this market mover (not the artificial intelligence revolution, which is certain to continue) may increase, persist or decrease over time with respect to the US company's stock price is very difficult to predict.