Bill Gates’ 10 Stock Positions with Huge Upside Potential

8. Caterpillar Inc. (NYSE:CAT)

Analyst Upside: 27.44%

No. of Hedge Fund Holders: 62

Caterpillar Inc. (NYSE:CAT) is famous for its construction and mining equipment, along with off-highway diesel and natural gas engines and gas turbines. The company has expanded notably in the past few years and has almost doubled its FCF over the past five years. The company remains solid fundamentally and is ready to overcome the downturns from tariffs.

Caterpillar Inc. (NYSE:CAT) posted a revenue of $64.88 billion, a decline of 3% from a year ago. The company’s sales volume was impacted due to weaker demand from end users and lower dealer inventories. However, the company improved its earnings per share to $21.90 from $21.21 in 2023. Despite lower sales, the company posted a record adjusted profit per share in 2024, up by 3% year-over-year. Caterpillar generated almost $9.4 billion of ME&T free cash flow, approaching its top-end target. The services revenue reached record levels of $24 billion, growing by 4% from a year ago. The company’s backlog soared from $1.3 billion to $30 billion, reflecting massive future demand, especially in Energy & Transportation. Caterpillar returned approximately $10.3 billion to shareholders through dividends and share buybacks last year.

Caterpillar Inc. (NYSE:CAT) has pledged almost $100 million to train future workers over the next five years, leveraging digital technologies. This will improve the company’s product efficiency and improve its product quality. Kyle Menges from Citigroup maintains a Buy rating on CAT with a price target of $320.