Caterpillar rated a buy on strong backlog, AI-driven demand, and cyclical recovery in construction and mining.

Caterpillar is rated a buy due to its $51 billion backlog, normalized dealer inventory, strong infrastructure demand, and rising commodity prices. Margins are expected to improve from operating leverage, price increases, and supply chain optimizations. The stock trades at a premium valuation justified by improved earnings quality and growth potential, with continued outperformance expected against the S&P 500.