As the largest manufacturer of construction equipment, Caterpillar (NYSE: CAT ) Literally a purveyor of picks and shovels. Well, the expensive kind. The company’s large and extra-large excavations can cost between $500,000 and $1.2 million each.
Even at the low end, that’s more than the median home price in the U.S. But even at those prices, Caterpillar has a receptive audience. Information Center Manufacturers, artificial intelligence (AI) business leveraging industrial stock. This relationship is a big reason why the stock has risen 124% in the past year and is now the second largest price-weighted member. The Dow Jones Industrial Average.
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At this time, Caterpillar d AI relationships are well documented And there was a big reason the company posted record revenue in the fourth quarter, and is sitting on a $51 billion order backlog. So it’s reasonable for investors to wonder if these industrial stocks can continue to roll this year and beyond. This can be, and importantly, help outside of the data center space.
While data centers add glamor to Caterpillar’s investment thesis, the company’s exposure stuff The mining sector remains a significant resource. There is also a data center, because copper is essential in the wiring of these facilities, and copper miners need equipment manufactured by Caterpillar.
Fortunately, there is more to AI than global commodity demand. Industrial metals and rare earth minerals are important in the production of a variety of clean energy products, including solar panels and wind turbines. As more countries adopt carbon-reduction policies, miners are encouraged to extract related materials from the ground, which means they need equipment manufactured by Caterpillar.
The industrial company shows that mining remains a vital part of the long-term growth story. On February 17, Caterpillar announced the acquisition of RPMGlobal, a move aimed at enhancing Caterpillar’s mining software and technology stacks.
Don’t forget the gold mining. The yellow metal is running fast, and these high prices could force miners to increase activity. By partnering with NewmontCaterpillar has some details on this topic. Importantly, gold miners have strong balance sheets, suggesting they can buy Caterpillar’s expensive equipment.
