SV_Techie
Entrepreneur & Startup Mentor, Technology Investor
Caterpillar looks like a prime short because it trades on AI-style hype without earnings to match. Its quarter-on-quarter numbers aren't proving out: last quarter it earned less than last September, and revenue versus last year doesn't look great. The stock ran up hard even with rates at their peak and likely to stay there for a while. x.com x.com x.comÂ
Caterpillar is an easy short because its price assumed revenue would double, and 24% growth is underwhelming by comparison. That stands even after the stock jumped premarket on what @brent_e_trader called a huge earnings beat and raise. x.comÂ
Caterpillar has been repriced from a century-old industrial into an AI growth stock at peak euphoria, and insiders who see that as temporary sold $87 million of shares in three months. The rerating came as hyperscalers ordered its engines and generators to power AI data centers. The stock now sits at Livermore's point 9, the test before selling short, as the market enters a correction phase. x.comÂ
Caterpillar's strong fundamentals should eventually help its shares find support once investors agree on a new multiple. The stock is down 35% from its peak after a parabolic run; continued separation of gross profit from operating expenses would be welcome. x.comÂ
Caterpillar is priced like a turbo-charged Walmart, which is worse for a cyclical company. A quoted post notes it trades at 35x next-twelve-month earnings while EPS estimates are at a record high; its past three big buying opportunities came at about 30x at notable earnings troughs. x.comÂ
Caterpillar is trading on P/E and valuation expansion rather than growth, with 2026 revenue the same as in 2023. It will be attractive to short after its stock split; for now, put premiums are too high. x.comÂ
Caterpillar's dip below Wall Street's average price target is a rare opportunity after a massive second-quarter double beat. Adjusted EPS was $8.17 against a $5.71 estimate, and sales were $20.5 billion against $18.36 billion expected. x.comÂ
Caterpillar has stretched too far on valuation relative to its main peers, especially Cummins. United Rentals, despite less direct exposure to data centers, is still catching up on multiples. x.comÂ
Caterpillar is expensive against its earnings at 25x next year's EPS, versus the 19x its industry usually gets. At 19x the $32.43 forecast EPS, give or take 12%, fair value is about $542-690, so at $811 the stock sits 18% above the top of that range. Forward EPS is 40% above trailing, so the view leans on forecasts, and it is a valuation-levels read rather than fundamental work. x.comÂ
Caterpillar is pivoting from heavy machinery into recurring software and autonomous technology on top of record fundamentals. Q1 2026 revenue rose 22% to $17.4 billion and adjusted EPS 30%, backlog is a record $63 billion, and construction revenue jumped 38%. The July Skycatch acquisition adds 3D drone mapping to its autonomous fleet, and it raised the dividend 8% after $5 billion of Q1 buybacks. Options gamma and moving-average support point to a breakout while those levels hold. x.comÂ
Caterpillar looks asymmetric to the downside near $904 because higher-for-longer rates hurt all its lines: data centers, metals and mining capex, and energy. Oil won't let the Fed cut, and Iran seems to be stalling, so fade a deal. Up 3x this year, near its high at over 40x, it faces normalization or a capex cycle reversal. Dealer demand needs healthy financing as IPOs drain liquidity, and model routing could cut compute needs. If wrong, upside looks limited. x.com x.com x.com x.com x.com x.com … Show more
