Is Caterpillar Finally Cheap After the Plunge, or Still Expensive?
The stock has lost 36% since June and took two hits in October for two different reasons. Yet it is still valued as an AI winner. The October 29 results will show whether record orders justify the premium—or whether it is just a story no one can see through.
Key points
Caterpillar has lost 36% since June and took two hits in October, each for a different reason.
The company has a record $72 billion backlog, but refuses to say how much of it is tied to data centers.
The best margins in years include $392 million that won’t recur next year.
Analysts broadly cut their price targets in October but left their ratings unchanged.
The Bulios model sees fair value 28% below where the stock trades today.
Two hits in one month—and each for a different reason
Caterpillar $CAT closed at 687 USD on October 23. That’s a 35.5% drop from its June 30 peak of 1 073,46 USD, with the stock losing 16.4% in the past month alone. The S&P 500 didn’t see anything like it over the same weeks—in fact, it edged higher from the end of July. This isn’t a broad market sell-off; it’s a sell-off in one stock.
What’s interesting is exactly what the market is punishing it for. On October 7, the stock fell 6% alongside Deere and PACCAR, as long-term US bond yields rose to their highest level in two decades. The logic is simple: excavators and trucks costing millions of dollars are bought on credit, and when credit gets more expensive, customers put off purchases. That day, Caterpillar fell like a classic cyclical industrial stock.
Two weeks later, on October 22, it lost nearly 5% again—but this time in entirely different company. After Meta’s results, GE Vernova and Bloom Energy fell more than 11%, Vistra dropped 10%, and Eaton fell 7%, as investors grew worried about how much data-center construction would cost and how long it would last. That day, Caterpillar fell like an AI stock.
Two identities, two sets of risks, one stock. And yet the market still values it based on just one of them—the more expensive one.