U.S. factories just posted their strongest quarter in years, and the gains aren’t limited to flashy AI chips. Federal Reserve data released this morning shows manufacturing production excluding high-tech industries rose at a 2.4% annualized rate in Q1 — one of the healthiest paces since 2021. The rebound reached traditional sectors such as machinery, metals, ... Caterpillar Continues to Crush the Magnificent 7 — Here’s How It Gets to $1,000
Rich Duprey
5 min read
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Caterpillar (CAT) shares rose 34% year-to-date to $768 and outperformed the Dow and most Magnificent 7 stocks in 2025 with a 61% gain, backed by a record equipment backlog as factories expand capacity across machinery, metals, and motor vehicles sectors.
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U.S. manufacturing production excluding high-tech industries accelerated at a 2.8% annualized rate in Q1, broadening capital spending beyond AI data centers and directly benefiting Caterpillar’s excavators, engines, and heavy machinery used for factory expansion and inventory restocking.
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U.S. factories just posted their strongest quarter in years, and the gains aren't limited to flashy AI chips. Federal Reserve data released this morning shows manufacturing production excluding high-tech industries rose at a 2.4% annualized rate in Q1 -- one of the healthiest paces since 2021. The rebound reached traditional sectors such as machinery, metals, and motor vehicles, with economists noting firmer capital spending that now stretches beyond data centers.
For retail investors, this matters because it points to a genuine cyclical lift in “old economy” demand. Caterpillar (NYSE:CAT) sits at the center of that shift. The heavy-equipment maker doesn't just sell bulldozers; it equips the factories, mines, and construction sites that turn policy incentives and reshoring into real output. Let's see why the numbers line up for a run at $1,000 per share by December.
Caterpillar didn't chase hype; it delivered results. In 2025, the stock became the top performer in the Dow Jones Industrial Average, rising roughly 61% for the year. That return topped six of the seven Magnificent 7 stocks on a total-return basis (price appreciation plus dividends), trailing only Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) by a slim margin. This year, the momentum is carrying forward. Year-to-date, Caterpillar shares are up 34% at around $768, second only to Intel (NASDAQ:INTC) among Dow components.
READ: The analyst who called NVIDIA in 2010 just named his top 10 AI stocks
Compare that to the broader market. While the S&P 500 logged solid but unspectacular gains, Caterpillar's machinery and power businesses benefited from steady order flow, even before this morning's factory data. The company's latest earnings release showed a record backlog, underscoring that customers aren't waiting -- they're buying equipment now. Investors who owned the stock through 2025 watched it outpace the very tech giants everyone chased. That track record matters when the next leg of growth arrives from non-AI manufacturing.