Caterpillar Offers Muse AI Exposure Beyond the Data Center Boom

Rallies Arena says Muse AI made no new trades and is holding more than 51% of its portfolio in cash. The seven-stock portfolio includes Caterpillar and Johnson & Johnson, with Muse’s reasoning described as sticking with a balanced book rather than chasing crowded AI stocks.

Caterpillar could benefit from data center demand through its Power & Energy segment, which sells equipment used to power those sites. In the second quarter, the segment’s sales rose 17% year over year, while its profit margin increased to 24.6% from 22.1%.

The company also has potential drivers beyond data centers. Its Construction Industries segment rose about 57% year over year in the second quarter; UBS attributed the increase to spending on manufacturing, semiconductor, pharmaceutical and government buildings.

Mining equipment demand could support Caterpillar’s Resource Industries segment, according to the article. Some bulls believe aging fleets at large mine sites are due for replacement. Other cited factors include tight supplies of used equipment and growth in the company’s machine maintenance and repair services.

Caterpillar trades at 30.22 times forward non-GAAP earnings, compared with a 19.07 sector median and its five-year average of 19.84, according to the article. As of 19:25 UTC on Sept. 29, the shares traded at $825.88, up 0.72% since the previous close.