10 Best Heavy Equipment and Industrial Machinery Stocks to Buy

1) Caterpillar Inc. (NYSE:CAT)

Number of Hedge Fund Holders: 50

Caterpillar Inc. (NYSE:CAT) is engaged in manufacturing and selling construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives.

Caterpillar Inc. (NYSE:CAT)’s progress in autonomous technology, mainly in the aggregates sector, provides a significant long-term opportunity for growth. As it continues to develop and implement autonomous solutions, the company is expected to see increased demand from customers looking to improve safety and reduce operational costs.

In November 2024, Caterpillar Inc. (NYSE:CAT) successfully demonstrated the fully autonomous operation of its Cat® 777 off-highway truck at Luck Stone’s Bull Run Quarry in Virginia. This was the company’s first deployment of autonomous technology in the aggregates industry, hinting at its expansion into new sectors.

Wall Street believes that the demand for critical commodities such as copper and lithium should fuel Caterpillar Inc. (NYSE:CAT)’s long-term growth, and the company appears to be perfectly positioned to supply the machinery needed. It plans to ramp up engine production by 125% and its focus on innovations such as remote-controlled equipment and predictive maintenance highlights its commitment to meeting higher demand and driving growth.

Diamond Hill Capital, an investment management company, released its “Large Cap Strategy” third-quarter 2024 investor letter. Here is what the fund said:

“Other top Q3 contributors included HCA Healthcare and Caterpillar Inc. (NYSE:CAT). Heavy construction machinery manufacturer Caterpillar has held up better than industry peers against a challenging macroeconomic backdrop and a generally slowing construction environment.”

While we acknowledge the potential of CAT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than CAT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.