Caterpillar (CAT) and Deere (DE) -- two non-Tech companies -- neatly capture the market dynamic that has played out this year between AI and non-AI stocks.
Construction equipment and heavy machinery maker Caterpillar (CAT) more than tripled from April 2025 lows through its highs this June, but as shown below, shares have been in free-fall over the last four months. After falling another 9% last week, CAT is in a 40%+ drawdown from record highs.
At the same time, competitor Deere (DE) has a price chart that has been much friendlier to shareholders lately:
In Q2, the AI Infrastructure trade went parabolic, and CAT, which is an AI play because it makes gas turbines and engines that deliver power for large datacenters, got caught up in the rally.
While Deere (DE) construction equipment is used to help build datacenters, they don't make turbines and engines that power them, so CAT left DE behind during the good times for AI in Q2.
But in classic "tortoise and hare" fashion, DE has managed to move into the lead on a one-year performance chart as AI names have been slaughtered lately.
At the end of the first half, CAT was up 85% year-to-date, which made it the best performing stock in the Dow 30. CAT is now up just 8% year-to-date and 7% year-over-year.
Slow-and-steady Deere (DE), on the other hand, is still up 45% year-to-date and year-over-year, and it's less than 5% from all-time highs versus more than 40% for CAT.
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