When you think of artificial intelligence (AI) stocks, companies focusing on construction equipment like Caterpillar might not be the first that pop into your head. It’s really more of a classic value investment, rather than a quick-growth stock. However, with the increasing demand for data centers, there’s a significant need for construction, and that’s where Caterpillar could shine—potentially becoming one of the standout stocks of the year.
Over the past year, this construction machinery manufacturer has seen its stock price surge by more than 170%. This makes it an appealing choice for anyone looking to invest in the physical infrastructure crucial for AI.
Will AI lead to the emergence of a new millionaire? Recently, a report highlighted a lesser-known company that’s become essential for both Nvidia and Intel, likening it to an “essential monopoly.”
Caterpillar’s products are integral for major hyperscalers like Amazon, Alphabet, and Microsoft as they construct the facilities needed for their AI infrastructure. This represents a massive investment from these tech giants, and Caterpillar is well-positioned to respond to that demand.
What’s impressive is that Caterpillar is among the few able to meet such a high level of requirement. The company recently reported its first-quarter results, revealing revenues of $17.4 billion, which is a substantial 22% increase compared to the first quarter of last year.
Adjusted earnings per share also saw a notable rise, going from $4.25 to $5.54 year over year. With a record backlog of orders, Caterpillar’s future earnings prospects seem promising.
The AI revolution won’t fully realize without companies like Caterpillar paving the way for essential data center construction. While semiconductors and cloud computing often steal the limelight, Caterpillar might just be the underappreciated yet crucial piece in the AI puzzle.
Should you consider buying Caterpillar stock now?
Before diving into a purchase of Caterpillar stock, it would be wise to weigh a few considerations. The team at Motley Fool’s Stock Advisor has highlighted what they believe are the top 10 stocks poised for significant returns in the coming years, and interestingly, Caterpillar isn’t on that list. These top picks could be more appealing for immediate investments.
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