The artificial intelligence (AI) trade can be a gift and a curse.
Just look at Caterpillar (NYSE: CAT)
Previously a non-tech darling of AI enthusiasts, this industrial stock is slumping ahead of its second-quarter earnings report, due on Tuesday, Aug. 4. With investors perhaps temporarily cooling on the AI trade, Caterpillar stock is off 16.4% over the past month and, as of July 28, was laboring 22.3% below its 52-week high. That’s a bear market.
To be sure, those are ominous data points, and they imply no margin for error on estimates calling for earnings per share of $6.25 on sales of $19.31 billion. Combine those factors, and market participants are understandably skittish ahead of the machinery giant’s earnings report. On the other hand, risk-tolerant investors with long-term perspectives may want to consider capitalizing on Caterpillar’s recent dip and evaluate the stock ahead of the Aug. 4 earnings update.