Caterpillar Stock Slumps on Downgrade Amid Data Center Doubts

Caterpillar's stock price has declined after a Wall Street downgrade raised concerns that the company's rally, driven by demand from data center construction, may have run ahead of its fundamentals.

The heavy-equipment maker has traded like a tech stock in recent months, with investors betting on sustained demand for its excavators, generators, and power systems due to the computing infrastructure boom.

Analysts described a growing backlash against the pace of data center buildouts, amid questions over whether aggressive spending plans announced across the industry will materialize as projected.

Caterpillar now trades at roughly three times its historical earnings multiple, a premium that assumes years of robust growth.