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Final month, we took a deep dive into the market alternatives surrounding heavy tools primarily based on the emergence of three sorts of applied sciences for driving new income development. The article centered on automation, digitization (IoT and digital twins), and electrification. We calculated there’s not less than a total addressable market (TAM) of $56 billion for automating, digitizing, and connecting the operation of heavy tools. Because the main development tools producer, Caterpillar (CAT) appeared like a doubtlessly good play on investing in high-tech heavy tools. In spite of everything, it has already developed about 600 robotic mining vehicles.
However as we began to scratch beneath the floor of Caterpillar’s technological transformation, we weren’t discovering a lot in SEC filings, transcripts, and information tales to supply a lot further coloration to the story. We’re not saying that Caterpillar will not be trending on this route, however perhaps it’s transferring on the pace of a crane in excessive winds. Latest acquisitions and investments counsel the corporate is extra centered on the electrification a part of the equation – a development with extra ambiguous payoffs at this juncture. For instance, Caterpillar participated in a $1 billion Sequence D final month for Redwood Supplies, a battery recycling startup, and a Seed spherical earlier this 12 months for {an electrical} engineering agency known as Lithos Vitality that makes a speciality of lithium-ion tech.
John Deere Inventory Plowing Forward
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