CAT, TSM, UNH, TER and ZBRA are five wide moat stocks that stand out for durable advantages, strong growth prospects and favorable demand across key markets.
Shares of Deere & Company (NYSE:DE | DE Price Prediction) and Caterpillar (NYSE:CAT) sit near the top of the industrial leaderboard this year, and both are adding to the gain again in Friday midday trading.
Caterpillar (CAT) closed the most recent trading day at $805, moving 1.29% from the previous trading session.
Caterpillar NYSE: CAT Chairman and CEO Joe Creed said the company has started 2026 with strong demand across its three operating segments, supported by power-generation activity, construction equipment sales and improving orders in resource industries.
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CAT's record backlog, strong earnings and raised 2026 outlook support its rally, but a premium valuation warrants caution.
Caterpillar is experiencing unprecedented demand as data center power needs drive a shift from backup to prime power generation. CAT's backlog now covers more than 2.4x last year's revenues, with orders extending to 2030, providing exceptional revenue visibility. Gross margins rebounded strongly, with Power & Energy margins rising to 24.6% in Q2, supporting the case for further EPS upside.
Caterpillar has fallen nearly 30% from its recent high, bringing the stock back toward a technical area where I believe the risk-reward has become attractive again. The market still values CAT largely as a cyclical industrial, but Power & Energy is becoming a much larger share of profits, with multi-year order visibility, stronger margins, and exposure. Services, connected assets, rental, and mining replacement demand are making CAT less dependent on the traditional construction cycle and could support a structurally higher valuation multiple.