CAT Shares Plummet Amid AI Slowdown Fears and Record Fuel Prices
Caterpillar Inc's (NYSE:CAT) shares declined on Monday due to fears of decreased AI-related capital expenditures and broader market volatility.
The decline is attributed to recent comments from prominent AI leaders, including Dario Amodei, Sam Altman, and Elon Musk, who called for a voluntary deceleration of frontier model development for safety alignment. This move has sparked concerns about the potential cooling of hyperscaler infrastructure spending, which has been a key driver of CAT's Power & Energy segment.
The segment saw a 72% surge in power generation sales during the second quarter of 2026, driven by high demand for natural gas generator sets and turbines supporting off-grid AI compute campuses. However, rising global diesel prices to record highs have introduced near-term margin pressure on construction fleet operators, which may offset some of the decline.