Caterpillar (CAT) and Deere (DE) are both up sharply year to date, by about 41% and 36%, versus 14% for the S&P 500. Based on average analyst price targets, Caterpillar has more upside, at about $971 versus its current $811 (about 20% higher), while Deere's target of about $694 is roughly 10% above its $633 price. Caterpillar is viewed as an AI play, driven by demand from hyperscalers building data centers: second-quarter revenue rose 24% to $20.5 billion, power and energy sales jumped 72%, and its order backlog reached $72 billion, up 92% over the past year. Deere's third-quarter revenue rose 5% to $12.6 billion and EPS rose 7.3% to $5.10, and management says 2026 marked the bottom of the agricultural equipment cycle with demand expected to rise in 2027. The author argues Caterpillar is the better investment right now.
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