Heavy Equipment Giant Caterpillar Taps Artificial Intelligence To Explore Breakout

Heavy Equipment Giant Caterpillar Taps Artificial Intelligence To Explore Breakout

Dow Jones component and heavy equipment leader Caterpillars (CAT) has just announced a new initiative with Luck Stone to drive autonomous solutions. CAT stock continues to explore a new buy point as it earns a spot on the IBD Breakout Stock Index.


On December 15, Caterpillar announced the partnership with Luck Stone to scale artificial intelligence in the aggregate industry and beyond. Luck Stone is the nation’s largest family-owned and operated producer of crushed stone, sand and gravel.

The collaboration will deploy Caterpillar’s autonomous solutions to Luck Stone’s Bull Run Plant in Chantilly, Virginia. In its first deployment in the aggregates industry, the alliance will expand Caterpillar’s autonomous truck fleet to include the 100-ton class (90-ton class) Cat 777.

Looking for artificial intelligence beyond mining, Caterpillar will implement its existing Cat MineStar Command for Hauling system at the Bull Run mine on a fleet of 777G trucks. This will allow the company to gain greater insights into quarry operations, to tailor next-generation autonomous solutions specifically for quarry and aggregate applications.

See who’s joining CAT stocks on the IBD Breakout Stock Index

Caterpillar mining growth and high demand

Caterpillar is the world’s leading manufacturer of construction and mining equipment, highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.

Last year, the Deerfield, IL-based company generated revenue of $51 billion. In the third quarter, Caterpillar posted a 21% sales increase to $15 billion.

Bottom-line metrics look solid, with Wall Street predicting 48% earnings growth this quarter, matching the same increase in Q3. Analysts expect EPS growth of 28% for the full year.

Looking at institutional demand, CAT shares have a “B+” accumulation/distribution rating while 78 funds with an “A+” rating own the stock.

In inventory control, Caterpillar earns top billing in the Machinery-Construction/Mining group, with a 98 Composite Rating. Joined by highly rated peers CNH Industrial (CNHI) and Terex (TEX), this group is a very strong no. 7 among the 197 groups of IBD tracks.

Artificial Intelligence Drives CAT Stock to Breakout

CAT stock has shown strength since last month’s feature in the IBD Stock Analysis, earning a spot on the IBD Big Cap 20. After forming a cup pattern, Caterpillar traded sideways to form a flat base seen on a weekly chart. The buy point is 239.95.

This price action is constructive and healthy, seen in contrast to the volatility and selling pressure in the market indices. In particular, the relative strength line reached a new high, confirming the stock’s resilience and leadership.

While watching the overall market, see if Caterpillar can dig up a new breakout in heavy volume.

IBD Breakout Opportunities ETF

The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to invest in the entire index in addition to, or instead of, buying individual stocks. Learn more about the ETF and Innovator funds here.

Follow Matthew Galgani on Twitter @IBD_MGalgani.


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