Zacks: Caterpillar Bull, RH Bear on AI Data Centers and Tariffs

Zacks Investment Research has highlighted Caterpillar (CAT) as its Bull of the Day and RH (RH) as its Bear of the Day in a report published today.

Recommendation Change

Zacks did not formally change its rating, but it emphasized the fundamental factors that make CAT a strong buy candidate and RH a sell candidate.

Analyst Rationale

Zacks sees Caterpillar benefiting from:

• Rising power demand from AI data centers, which require massive backup generators—a market CAT dominates.
• A record backlog, providing clear visibility into future revenues.

RH, on the other hand, faces:

• Tariff pressures that increase costs of imported materials.
• Housing market uncertainty due to high interest rates, dampening demand for home furnishings.

Context

CAT is trading near all-time highs, while RH has fallen over 30% in the past year. Other analysts have mixed views; some believe RH could recover if tariffs are eased.

Conclusion

CAT offers exposure to infrastructure and energy trends, while RH carries higher risks tied to trade policy and housing. Investors should conduct further research before making decisions.