Melius Turns Bullish on Cummins (CMI), Citing AI and Operational Upside

Cummins Inc. (NYSE:CMI) is one of the AI Stocks to Watch Out For in 2025On September 3, Melius analyst Rob Wertheimer upgraded the stock from Hold to Buy with a price target of $500.00.

The firm cited three key factors behind the stock upgrade, with artificial intelligence demand viewed as the most obvious source of upside.

“We are upgrading CMI shares to Buy, and raising our two-year price target to $500, 25% upside from today’s price. Though AI demand is the most obvious source of upside, our thesis has three parts, and each can drive upside. First, Cummins is improving operationally, with room to go.”

“Second, trucks are in a downcycle, and Cummins at ~18x earnings represents an attractive valuation, whether or not a prebuy kicks this upcycle off sooner. Finally, consensus estimates underestimate the revenue and margin potential flowing out of the capacity expansion in large engines for gensets, led by AI demand. We are 13% above consensus in 2027.”

While we acknowledge the risk and potential of CMI 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 CMI and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.