Caterpillar (CAT) just landed a headline contract, with Anthropic agreeing to buy about US$3.4b of gas generators for AI data centers, taking over 1.7 gigawatts of existing OnePWR orders.
Caterpillar’s share price has slipped over the past month, with a 30 day share price return down 27% and a 90 day share price return down 32%. Yet the stock still carries a 3.8% one year total shareholder return and a very large 5 year total shareholder return above 200%, so the Anthropic deal lands as a fresh test of whether long run momentum is cooling or simply pausing after a strong multi year run.
Scan other industrials tied into the same AI buildout by reviewing the hand picked 53 AI infrastructure stocks along with Caterpillar’s latest Anthropic contract headlines.
Caterpillar has a record backlog tied to AI power and a share price that just dropped by roughly a third in six months. Is most of the reward now behind the stock, or does the valuation still suggest room ahead?
Most Popular Narrative: 35% Undervalued
Caterpillar closed at $584.57 while the analyst consensus Narrative on Simply Wall St sets fair value at about $902. This gap frames the Anthropic deal inside a much larger AI power and backlog story that analysts are already trying to price.
The plan to increase large engine capacity to three times 2024 levels by 2030 and expand turbine capacity to 2.5 times 2024 levels, together with the restart of the 10 megawatt medium speed gas engine targeting about 1.5 gigawatts of shipments from Q4 2026, positions Caterpillar to serve future natural gas and gas compression demand and potentially lift revenue and free cash flow as these assets are deployed.
See why 237 investors see Caterpillar as 35% undervalued.
Result: Fair Value of $902 (UNDERVALUED)
Still, the tariff bill of about US$2.2b and the risk of AI related power projects being delayed or downsized could easily challenge the bullish Caterpillar narrative.
Find out about the key risks to this Caterpillar narrative.
Next Steps
Mixed signals around Caterpillar and AI power make this a good moment to check the data yourself and pressure test the bullish and cautious arguments. To see how the current enthusiasm compares with the concerns on the table, review the 4 key rewards and 1 important warning sign.
Looking for more investment ideas beyond Caterpillar?
If Caterpillar’s AI power story has your attention, use the same structured approach to look for other opportunities before they move without you.
- Target resilience first by scanning companies with stronger finances and cleaner balance sheets using the list of solid balance sheet and fundamentals (24 results).
- Look for quality at a discount by reviewing the 35 high quality undervalued stocks and comparing pricing gaps that may not stay open for long.
- Prioritise stability and income potential by checking out the 5 dividend fortresses offering higher yields with a focus on durability.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com