We recently compiled a list of the 10 Best Heavy Equipment and Industrial Machinery Stocks to Buy. In this article, we are going to take a look at where Deere & Company (NYSE:DE) stands against the other heavy equipment and industrial machinery stocks.
The industrial heavy equipment market includes machinery and tools used in construction, mining, agriculture, and industrial applications. According to 360iResearch, this sector is critically important for infrastructure development, mining operations, and large-scale agricultural productivity.
Growing infrastructural developments, rapid urbanization, and the growth of mining activities are fueling the necessity for heavy equipment. In agriculture, improved machinery efficiency remains critical for meeting global food demands. As per 360iResearch, market growth continues to be influenced by technological advancements like automation, loT integration, and sustainability trends focusing on fuel-efficient and electrically powered machinery.
Growth Drivers for the Heavy Equipment Market
Research Nester believes that the autonomous heavy equipment market was worth more than US$11.43 million in 2024 and should surpass US$26.56 million by 2037. The primary growth driver for the rapid expansion is the strong growth projected in the construction industry. The growth in the building and construction industry is aligned with the demand for heavy equipment.
Market experts opine that growth in the construction industry is expected to stem from lower interest rates in 2025. The types of heavy equipment that are used in the construction industry include earthmoving equipment, and material construction industry, among others.
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Key Trends to Look Out For in 2025
As per Stumble Forward, the industrial machinery landscape has been witnessing a massive transformation. Technological advancements are taking place at a rapid pace, with manufacturers adopting cutting-edge tools and processes to beat the competition. Increased automation and robotics, Al integration, green manufacturing, and 3D printing for customization are the key trends likely to drive growth for the industrial machinery industry in 2025.
Automation in industrial machinery tends to reduce the chances of human error and supports streamlining production. Robots, together with machine learning, are being employed to inspect, assemble, and even pack goods. Stumble Forward went on to add that Al-powered systems can predict equipment failures, reducing unexpected costly repairs. This predictive maintenance technology should continue to help industries save thousands of dollars in repair costs.
In 2025, industrial machinery is expected to be designed in a way that will promote sustainability. Energy-efficient machines, including those running on renewable energy, or producing less waste, will be adopted. Finally, the adoption of 3D printing in industrial machinery, which can help produce parts that are lightweight yet incredibly strong, is expected to grow as manufacturers continue to realize its importance. Stumble Forward also added that the ability to print intricate designs should result in innovation, enabling engineers to test prototypes and adjust accordingly.
Our Methodology
To list the 10 Best Heavy Equipment and Industrial Machinery Stocks to Buy, we used a screener and sifted through online rankings. After getting a list of 25-30 stocks, we filtered out the ones having high hedge fund holdings. Finally, the stocks are arranged in ascending order of their hedge fund sentiments, as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A combine harvesting crops, showing the capabilities of the company’s agriculture equipment.
Deere & Company (NYSE:DE)
Number of Hedge Fund Holders: 41
Deere & Company (NYSE:DE) is a global leader in agricultural, construction, and forestry equipment manufacturing.
As per Fortune Business Insights, the global agriculture equipment market size was valued at US$180.81 billion in 2023. This market is expected to grow from US$193.46 billion in 2024 to US$344.77 billion by 2032. These growth prospects offer a substantial opportunity for Deere & Company (NYSE:DE), mainly in lower- and middle-income countries, where agricultural practices are evolving rapidly.
Moreover, Deere & Company (NYSE:DE)’s continued investment in precision agriculture technology places it well as an industry leader in innovation. With farming becoming increasingly data-driven and automated, the company’s advanced equipment and software solutions should become increasingly attractive to farmers looking to maximize efficiency and productivity. Moreover, the trend of farm consolidation continues to drive larger agricultural operations to invest significantly in advanced machinery. This should create a favorable environment for Deere & Company (NYSE:DE)’s offerings.
Deere & Company (NYSE:DE)’s focus on developing integrated technology platforms that provide seamless connectivity and data analysis capabilities is expected to create a significant competitive advantage. By providing farmers with tools to optimize their operations, Deere & Company (NYSE:DE) might be able to command premium pricing and increase customer loyalty. This will ultimately lead to market share gains even in a competitive environment.
Parnassus Investments, an investment management company, released the Q2 2024 investor letter. Here is what the fund said:
“Deere & Company (NYSE:DE) stock dropped after the company released underwhelming fiscal second-quarter earnings and lowered its 2024 guidance. Although the company is going through an equipment demand downturn, we believe it will demonstrate better-than-expected through-cycle performance.”
Overall DE ranks 2nd on our list of the best heavy equipment and industrial machinery stocks to buy. While we acknowledge the potential of DE 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 DE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.