Caterpillar Falls 4% While Deere Edges Higher: Is the Data Center Power Trade Unwinding?

Caterpillar Falls 4% While Deere Edges Higher: Is the Data Center Power Trade Unwinding?

David Moadel

Mon, September 14, 2026 at 6:40 PM GMT+3 5 min read

Quick Read

• Caterpillar dropped 4% Monday while Deere rose 1%, a split explained entirely by CAT's AI data center power business and DE's lack of any exposure.

• XLI fell 2% versus SPY's 0.8% drop, making Caterpillar the industrial sector's anchor weight, not just a passenger in a broad market selloff.

• Caterpillar's $72 billion backlog and orders already booked into 2029 and 2030 suggest Monday's selloff is a momentum unwind rather than a collapse in actual demand.

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Shares of Caterpillar (NYSE:CAT) are down 4% to $783.15 in Monday trading, leading industrial names lower. The slide caps a rough stretch, with Caterpillar stock down 8% over the past month even as it holds a 38% gain year to date.

Deere & Company (NYSE:DE) stock is going the other way, up 1% to $684.25, and Paccar (NASDAQ:PCAR) stock is little changed at $121.99, off 0.6%. The split matters because Caterpillar is the only one of the three with a large power generation business tied to artificial intelligence (AI) data center construction.

The sector picture reinforces that read. The Industrial Select Sector SPDR ETF (NYSEARCA:XLI) is down 2%, and the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is off by 0.4%. Caterpillar is sliding faster than the industrial fund, which itself is down by more than the broad market, so Caterpillar stock is the weight rather than a passenger.

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AI Warnings Shake the Data Center Trade

No company-specific announcement from Caterpillar sits behind Monday's decline. The backdrop is a weekend policy exchange in which Anthropic CEO Dario Amodei called on frontier AI companies to slow the pace at which they improve model capabilities, and OpenAI CEO Sam Altman said he agreed. That's pushed selling across names whose valuations rest on AI infrastructure buildout continuing at its current pace.

Caterpillar's power generation segment supplies large reciprocating engines and turbines into data center construction, and power generation sales to users grew 72% in Q2 2026 on that demand. On the August earnings call, Caterpillar CEO Joe Creed said "we haven't seen any customers back off of demand," and the company's backlog reached $72 billion at quarter-end. The mechanism for Monday's move looks like a momentum unwind in the AI-linked portion of the Caterpillar story rather than a change in the underlying order book.

Deere Rises While Caterpillar Falls

Deere sells agricultural and construction equipment and carries no meaningful data center exposure. Deere stock is up 48% year to date, ahead of Caterpillar, after fiscal Q3 2026 delivered GAAP EPS of $5.10 and a full-year net income guidance raise to $4.75 billion to $5 billion.

Paccar builds heavy-duty trucks under Kenworth, Peterbilt and DAF, has no AI-linked business, and Paccar stock is close to unchanged Monday. Caterpillar is the only one of the three with a power generation segment tied to data center demand, and it's the only one falling sharply, which is consistent with an unwind reading without proving it.

Separately and over a different timeframe, the industrial fund is up 10% year to date, well behind both Caterpillar and Deere. That gap is the measure of how narrow this year's industrial leadership has been, and Caterpillar sits at the center of it (we profiled seven of the power, cooling, and networking suppliers riding the same data center buildout in a free report on AI infrastructure names that aren't chipmakers).

What to Watch

Investors can watch for whether Caterpillar's backlog commentary at the next quarterly update reaffirms the delivery cadence Creed described on the August call, when he said "we're starting to take orders into 29 and 30 already." An order book stretching into 2029 and 2030 doesn't evaporate because two executives published essays over a weekend.

The bear case for Caterpillar is that a large part of this year's re-rating in the stock assumed data center power demand extending indefinitely, and that's precisely the assumption the weekend warnings called into question. Given how quickly the AI narrative has shifted, sizing your exposure to Caterpillar around a durable backlog rather than a straight-line power buildout may prove the sturdier posture into year-end.

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