Shares of Caterpillar fell sharply Friday, sliding 4.79%, or $50.66, to $1,006.35 in midday trading, as investors locked in gains from one of the most remarkable stock rallies of the year following the heavy equipment maker's unlikely transformation into a beneficiary of the artificial intelligence boom.

The decline marks a notable pullback for a stock that just days earlier had crossed a milestone few would have predicted for a century-old maker of bulldozers and mining equipment.

An extraordinary year by any measure

Caterpillar's run over the past 12 months has been staggering by historical standards for an industrial company. The stock surged approximately 172% over the past year, closing Thursday at $1,057 — a level that made Caterpillar one of just two companies in the Dow Jones Industrial Average trading above $1,000 per share, and the best-performing stock in the index this year.

That climb culminated earlier this week in a milestone that underscored just how far the stock has come. Following a recent market rally, Caterpillar pushed past $1,000 for the first time on June 22, 2026, marking its seventh consecutive winning session at the time.

The AI connection behind the rally

The driving force behind Caterpillar's transformation has little to do with its traditional construction and mining equipment business and everything to do with the company's role in powering the artificial intelligence infrastructure boom. Caterpillar's strong demand for its power generation equipment has been particularly linked to AI infrastructure projects, with the company building a record $63 billion order backlog and projecting future revenue of........

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