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DA Davidson Raises Caterpillar (CAT) Target Following Better-Than-Expected Quarter

With YTD returns of 53.9% as of May 5, Caterpillar Inc. (NYSE:CAT) is included among the 10 Best Performing Dividend Stocks So Far in 2026.

On May 4, DA Davidson raised its price recommendation on Caterpillar Inc. (NYSE:CAT) to $845 from $650. It reiterated a Neutral rating on the shares following the company’s better-than-expected Q1 results. The analyst said most key metrics came in well above expectations, while management also raised its outlook. According to the firm, Caterpillar is being increasingly driven by data center applications and is now targeting 3x growth in its large engine capacity by 2028, up from its previous 2x target.

On May 5, Argus raised its price goal on CAT to $990 from $820. It kept a Buy rating on the stock. The analyst said Caterpillar has recently benefited from strong growth in data centers, which is driving higher demand for its power generation products, including reciprocating engines, gas turbines, and solar microgrid systems. Argus also noted that Caterpillar has seen solid growth in its oil and gas business, along with increased demand for construction equipment used in building data centers. The firm expects demand in these areas to remain strong through 2026 and over the longer term.

Caterpillar Inc. (NYSE:CAT) manufactures construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Its business segments include Construction Industries, Resource Industries, and Power & Energy.

While we acknowledge the risk and potential of CAT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CAT and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 10 Best Blue Chip Stocks to Invest In According to Billionaires and 10 Best BDC Stocks to Buy Right Now.

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Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

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  • 175 Teslas
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  • 140 Metas
  • 84 Googles
  • 65 Microsofts
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  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
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