What happened
In its Q2 2026 investor letter, Auxier Asset Management said Caterpillar Inc. (NYSE:CAT) and Gates benefited indirectly from AI infrastructure expansion, especially rising demand for data-center energy generation and cooling.
Why it matters
Industrials were the quarter's strongest sector as investors shifted focus to AI buildout rather than AI model development. The S&P 500 gained 15.2%, while Auxier Focus Fund's Investor Class rose 8.82%.
What to watch
Caterpillar's AI-linked demand hinges on continued data-center construction and power needs. The stock closed at $784.00 on September 14, 2026, down 7.12% over the past month but up 77.23% over the past year.
WHO IT HITSInvestors and analysts tracking industrial stocks and AI infrastructure supply chains may see Caterpillar as an indirect AI beneficiary, though hedge fund holdings slipped to 84 portfolios from 87.
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Auxier Asset Management's second-quarter 2026 investor letter frames Caterpillar as an indirect winner from the AI boom. The quarter saw the S&P 500 rebound 15.2% from a first-quarter decline, driven by accelerating capital spending on AI infrastructure. Technology hardware companies gained significantly, and semiconductor and data-center-related businesses benefited from supply constraints and strong demand. Meanwhile, enterprise software remained under pressure as investors reassessed AI disruption risks and compressed valuations. Within this backdrop, Auxier highlighted that industrials were the strongest sector, with tech-facing industrial players benefiting from a shift in investor focus toward AI buildout rather than the development of AI models. Caterpillar and Gates were cited as beneficiaries of increased demand for energy generation and cooling capacity in data centers.
The letter also noted that Auxier Focus Fund's Investor Class gained 8.82% for the quarter and 10.70% for the six months ended June 30, 2026. Despite strong earnings growth across the broader market, Auxier raised concerns about rising margin debt, increased leverage, and elevated capital flows into high-growth technology areas that could amplify future volatility. The firm said it continues to focus on identifying enduring businesses with strong competitive advantages, resilient cash flows, and sustainable long-term growth potential.
For Caterpillar, the AI infrastructure connection is indirect. The stock closed at $784.00 on September 14, 2026, down 7.12% over the past month but up 77.23% over the past year, with a market capitalization of $360.39 billion and a 52-week range of $423.32 to $1,073.46. Hedge fund portfolios holding the stock slipped to 84 at the end of the second quarter from 87 in the previous quarter. Whether Caterpillar's AI-linked demand continues likely hinges on data-center construction and power needs, which the body ties to energy generation and cooling capacity.
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