The industrial economy is telling two very different stories. Construction, infrastructure, and mining equipment manufacturers are enjoying strong demand, while parts of the agricultural machinery market remain under pressure. Caterpillar reports Thursday morning, offering a fresh look at five companies positioned across these increasingly different investment cycles.
AI Rags Riches (Sponsored)
Look who Trump just shook hands with
Could this man help mint the next wave of AI millionaires?
He grew up in one of the poorest counties in Kentucky and is a former dishwasher at Denny’s.
He could tell you exactly what happens next with this AI boom
This is about a new AI industry set to grow 190,597% by 2040.
Click here to see the details
Theme: Heavy Equipment, Construction Machinery, Mining, Industrial Capital Spending, and Agriculture
The Industrial Recovery Isn't Evenly Distributed
Industrial companies are often grouped together as though they follow the same economic cycle. But the latest earnings suggest customer demand is increasingly tied to where the equipment is used.
Infrastructure investment, mining activity, and construction projects are supporting machinery orders. Farmers, meanwhile, continue to face pressure from agricultural commodity prices and operating costs.
Caterpillar's second-quarter results reflect a stronger market.
Revenue increased 24% to a company-record $20.5 billion. Construction Industries sales jumped 35%, while Resource Industries, which includes mining equipment, grew 20%.
The company also reported stronger order rates and a growing backlog across its major businesses.
But these results don't necessarily mean the entire machinery industry is booming. Some customers are increasing spending aggressively, while others remain cautious about purchasing expensive equipment.
For investors, identifying that difference is becoming increasingly important.
What's Driving It
Caterpillar Reports Thursday
Caterpillar releases third-quarter results Thursday, October 29, before the market opens. Its earnings call begins at 8:30 a.m. ET.
The company enters the report with considerable momentum. Second-quarter operating profit increased 50%, supported by higher equipment volumes and improved pricing.
Construction demand has been especially strong, with sales to North American construction industries up 50% during the quarter.
But the next test is whether that momentum can continue.
Management's commentary on dealer inventories, customer orders, and its growing backlog should help determine whether demand is broadening or becoming concentrated in a handful of industries.
Deere Shows the Other Side
Deere's latest results reveal a surprisingly different picture.
Its fiscal third-quarter Production and Precision Agriculture sales fell 6%, reflecting lower shipments of larger farming equipment.
Yet Construction and Forestry sales increased 18%, while Small Agriculture and Turf sales grew 12%.
Even within the same company, customers are following different spending patterns.
Deere expects 2026 to mark the bottom of the current agricultural equipment cycle, supported by improving used-equipment inventories and early order trends.
That creates an interesting investment question: Should investors favor machinery companies already enjoying strong demand, or those positioned for a potential agricultural recovery?
The Chain Reaction
Infrastructure and mining investment expands → contractors order more machinery → rental fleets increase utilization → equipment manufacturers grow revenue and backlogs → engine and component suppliers benefit
Meanwhile, weaker agricultural spending → farmers delay equipment purchases → large machinery orders remain pressured → manufacturers prioritize inventory and cost control
The risk is that a broader economic slowdown eventually weakens construction and industrial spending too.
What's Working
Contractors Are Spending Again
United Rentals provides one of the clearest signals of improving demand.
The equipment rental giant reported record third-quarter revenue of $4.89 billion, including $4.32 billion in rental revenue.
Fleet productivity rose 6.5%, suggesting stronger equipment utilization, higher rental rates, and a more favorable business mix.
Management also raised full-year revenue guidance to between $18 billion and $18.2 billion.
Those results suggest contractors are keeping equipment busy and investing in large projects.
Specialized Equipment Is Holding Up
Terex provides another useful example.
Its second-quarter sales reached $2.2 billion, increasing 8.5% on a comparable pro forma basis. Bookings rose 25.2%, supported by demand across specialized equipment markets.
Cummins also reported record second-quarter revenue of $9.5 billion, up 9%, as data-center power generation and improving North American truck demand supported results.
These companies demonstrate that industrial growth extends beyond traditional construction machinery.
What to Watch
Thursday's Caterpillar report should focus on Construction Industries, Resource Industries, backlog growth, dealer inventories, margins, and management's outlook for 2027.
Watch whether North American construction demand remains strong and whether mining customers continue investing in new equipment.
Thursday also brings the first estimate of third-quarter U.S. GDP at 8:30 a.m. ET.
The strongest signal would be continued construction and mining growth accompanied by improving demand across other industrial markets.
Caterpillar (CAT)
What it does: Manufactures construction machinery, mining equipment, engines, and industrial power systems.
Why it fits: Direct beneficiary of infrastructure investment, mining activity, and expanding industrial projects.
What stands out: Second-quarter revenue increased 24% to $20.5 billion, with Construction Industries sales growing 35%.
The Takeaway: Buy this if you want the established heavyweight benefiting from strong machinery and infrastructure demand.
The risk is slowing orders after an exceptionally strong period of growth.
Deere (DE)
What it does: Manufactures agricultural machinery, construction equipment, forestry products, and precision farming technology.
Why it fits: Offers exposure to both improving construction demand and a potential recovery in agricultural equipment spending.
What stands out: Construction and Forestry sales increased 18%, while large agricultural equipment sales declined 6%.
The Takeaway: Buy this if you want a longer-term agricultural recovery play with a growing construction business.
The risk is a prolonged agricultural downturn and weaker farmer profitability.
Here's What Happens Next (Sponsored)
President Trump signed Executive Order #14330 — opening physical precious metals to retirement portfolios when it takes effect in 2027.
But if you're 59½ or older, you can move part of your 401(k) or IRA into gold today — tax-deferred and penalty-free. J.P. Morgan has outlined a path toward $8,500 an ounce.
Yes, Send Me My FREE Retirement-to-Gold Guide.
© 2026 APR Insights. All rights reserved. Tax benefits depend on individual circumstances. Always consult a tax professional. Not all retirement accounts qualify.
*This is an advertisement. If you no longer wish to receive promotional messages from this advertiser, please unsubscribe here. Or write to: 351 Paseo Nuevo, Floor 2, Santa Barbara, CA, US 93101.
United Rentals (URI)
What it does: Operates North America's largest equipment rental business, serving construction and industrial customers.
Why it fits: Contractors often rent equipment rather than purchase expensive machinery outright.
What stands out: Third-quarter rental revenue increased 17.8%, while management raised full-year revenue guidance to $18 billion to $18.2 billion.
The Takeaway: Buy this if you want direct exposure to construction activity without relying entirely on equipment purchases.
The risk is weaker rental utilization and falling demand during an economic slowdown.
Terex (TEX)
What it does: Manufactures specialized equipment for construction, materials processing, utilities, waste management, and emergency services.
Why it fits: Its diversified machinery portfolio benefits from infrastructure projects and specialized industrial spending.
What stands out: Second-quarter bookings increased 25.2% on a pro forma basis, while backlog reached $6.9 billion.
The Takeaway: Buy this if you want a more specialized industrial equipment company with opportunities across several infrastructure markets.
The risk is uneven customer demand and challenges integrating acquisitions.
Twenty Seven Threats (Sponsored)
In 2027 a portfolio could be hit from three directions: a falling dollar, a turning economy, or the AI trade breaking.
I'll take the 10-stock list
Most investors watch one.
The free 2027 Outlook from Good Morning Alerts covers all three.
Open the full 2027 Outlook
10 stocks with real cash flow, pricing power and sturdy balance sheets.
Every name and ticker.
Get me all 10 names
*This ad is sent on behalf of Guardian Financial Publishing LLC, doing business as Stable Financial Publishing, 1013 Centre Road Suite 403-D, Wilmington, DE 19805. Nothing here is investment, financial, legal, or tax advice, and it is not a recommendation or solicitation to buy or sell any security. Investing involves substantial risk, including loss of principal; past performance does not guarantee future results. Stable Financial Publishing, its owners, employees and contributors may hold positions in securities mentioned and may trade them at any time. If you no longer wish to receive these offers, [unsubscribe link]. Privacy: https://guardian.pub/privacy-policy/ · Terms: https://guardian.pub/terms-of-service/
Cummins (CMI)
What it does: Manufactures engines, power-generation systems, and components for trucks, industrial machinery, and energy infrastructure.
Why it fits: Benefits from industrial equipment production, improving truck markets, and demand for backup power.
What stands out: Second-quarter revenue reached a record $9.5 billion, supported by strong data-center power demand.
The Takeaway: Buy this if you want diversified industrial exposure with an additional growth opportunity in power generation.
The risk is weaker truck demand and pressure on manufacturing margins.
Follow the Spending, Not the Sector
The machinery industry is increasingly divided between customers investing aggressively and those still protecting their budgets.
Caterpillar and United Rentals benefit from construction activity, Terex and Cummins serve specialized industrial markets, and Deere offers exposure to a potential agricultural recovery.
Thursday's Caterpillar results should provide another important test of industrial demand.
The opportunity isn't simply owning heavy equipment stocks. It's identifying which customers are still willing to spend.
Best Regards,
— Adam Garcia
Elite Trade Club
Click here to get our daily newsletter straight to your cell for free.
P.S. Just like this newsletter, it's 100% free*, and you can stop at any time by replying STOP.
