Caterpillar Bets on AI-Driven Diggers While Wall Street Trims Its Price Target

Caterpillar partners with CoreWeave to train autonomous systems faster using 18 petabytes of machine data, as Truist cuts its price target.

Caterpillar is pushing artificial intelligence straight into the dirt. Through a partnership with cloud provider CoreWeave, the US machinery giant is sharply accelerating how quickly it trains autonomous systems across its equipment fleet — a move that lands as investors grow choosier about the industrial sector's growth story.

The stock told two different stories this week. Shares closed Tuesday at EUR 767.00, up 1.4%, extending a recent advance in European trading. By Wednesday the mood had flipped, with the stock down 4.0% at EUR 736.20 as skepticism toward cyclical industrials deepened.

Turning 18 Petabytes Into Same-Day Training

At the heart of the technology push is a mountain of field data. Caterpillar holds roughly 18 petabytes of machine data, and its equipment continuously generates terabytes of environmental and operational readings through LiDAR sensors, cameras and control modules during everyday use.

Working alongside CoreWeave, the company leans on Nvidia models to automatically label and process that raw material. According to Caterpillar, preparing sensor data now takes hours instead of weeks or months, letting simulation tweaks and neural-network training wrap up within a single working day. For shareholders, it's a signal of how the company is bridging heavy manufacturing and digital automation.

Data Centers Are Feeding the Power Business

The AI connection goes beyond algorithms and reaches into electricity generation. Large data-center operators are increasingly ordering backup generators and mobile power solutions to secure their surging electricity needs.

American Intelligence & Power, for instance, locked in natural-gas generators with a combined capacity of two gigawatts for its Monarch Compute Campus earlier this year, with deliveries scheduled through August 2027. That demand shows up in the order book: Caterpillar's backlog recently stood at USD 72.1 billion, underpinned by solid gains in its construction and energy segments.

A Lower Target, and a Higher EPS Estimate

The macro backdrop is hardly frictionless. Truist Securities kept its "Buy" rating but cut its price target to USD 1,100 from USD 1,225. Analyst Jamie Cook pointed to risks from persistently high interest rates, rising procurement costs and delays on major infrastructure projects. Caterpillar also expects full-year headwinds of roughly USD 2.2 billion from import tariffs.

Short-term earnings expectations moved the other way. Zacks Research raised its third-quarter 2026 earnings-per-share estimate to USD 6.78 from USD 6.57 — an analyst revision, not a company forecast.

Factory Expansion and a Dealer Deal

Operationally, Caterpillar is pressing ahead with capacity growth regardless of the sector debate. On September 30 it announced plans to invest about USD 1 billion in North Carolina, channeling funds into expanded production for its Cat Compact line, including a planned Sanford factory for compact track loaders and telehandlers.

The company is also deepening vertical integration in distribution. It has struck an agreement to acquire the John Fabick Tractor Company (Fabick Cat), a dealer serving parts of Missouri, Illinois, Wisconsin and Michigan's Upper Peninsula. Financial terms were not disclosed, and the deal remains subject to regulatory approvals and customary closing conditions.

Despite Wednesday's 4.0% pullback, the longer-term picture stays bright. The shares have climbed 49% since the start of the year, with the mix of traditional construction equipment, sturdy demand for power generators and progress on autonomous software lending the business model notable resilience.