What to Watch With Caterpillar Stock Before Investing

Caterpillar (NYSE: CAT) is an iconic company. Its mix of construction machinery, resources (mining and aggregates) machinery, and energy and transportation equipment is widely recognized, and its power generation engines have encouraged investors to bid the stock up, thanks to its potential role in artificial intelligence (AI)/data centers.With these factors in mind, here's what you need to know before buying the stock.Burgeoning demand for power generation equipment for data centers (it provides backup power if needed) will benefit the company, but it isn't likely to significantly move the growth needle. And it's far from enough to make Caterpillar an AI/data center stock. For example, its power generation sales were $2 billion in the first quarter, representing almost 15% of its machinery, energy, and transportation (MET) segment sales. It's not insignificant, and supports the case for buying the stock, but it doesn't change the fact that Caterpillar is still a highly cyclical stock.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool