US machinery stocks climb in 2025, led by Caterpillar's 60% surge

U.S. construction and agricultural equipment makers posted gains in 2025 as data-center construction accelerated and the agriculture market showed early signs of recovery

Shares of Caterpillar CAT.N rose about 60% YTD, while Deere DE.N was up roughly 11% since the start of the year vs a 17.3% rise in the S&P 500 index .SPX

Caterpillar's energy and transportation unit has fueled much of the company's growth in recent quarters as AI-driven investments in power-hungry data centers have boosted demand for its backup power-generation systems

Rising forestry and small-farm demand, coupled with cost cuts, are seen aiding Deere after a period in which farmers held off on big-ticket buys

Sweeping U.S. tariffs have raised input costs for both firms, leading to billions of dollars in financial impacts

CAT holds a forward 12-month PE ratio of 25.9 vs an industry median of 17.54

DE holds a forward 12-month PE ratio of 26.94 vs an industry median of 17.44