EXCLUSIVE: Caterpillar Stock The ‘Gold Standard’ For AI, Market Expert Says ‘Pick And Shovels’ Play For Data Centers

One of the hottest blue-chip stocks in 2026 comes from outside the technology sector and may be surprising to investors who are ignoring sectors like industrials. Caterpillar Inc (NYSE:CAT) stock is up 65% in 2026 and Freedom Capital Markets Chief Market Strategist Jay Woods thinks there could be even more upside connected to the AI trade.

Caterpillar: The Gold Standard

Woods is no stranger to highlighting the AI opportunity for large-cap tech names, like those in the Magnificent Seven. When it comes to other sectors, Caterpillar could be one of the most underrated names connected to AI.

"When we talk about the AI story and the infrastructure behind it, Caterpillar to me is the gold standard of that bill," Woods tells Benzinga in an exclusive interview.

The market expert highlighted an interview with OpenAI CEO Sam Altman and CNBC co-host David Faber that featured Caterpillar vehicles in the backdrop related to building data centers. Woods said this could be Caterpillar passing "the eye test alone."

Woods said it may not be all smooth sailing for Caterpillar and the building of data centers with some politicians against these new builds. There are also some areas of the country that don’t want data centers in their backyards, but Woods says the build is necessary and that opinions may change in the future.

Outside of data centers, Woods also said that Caterpillar is benefiting from areas like HVAC, which has a backlog of three to five years. The market expert says Caterpillar is benefiting from the infrastructure bill and build-out.

"Caterpillar is your gold standard."

Woods says Caterpillar stock has a "tremendous runway on a valuation basis" and on a "technical basis."

"It just checks all the boxes and then you put the big story behind it, the growth story and the infrastructure bill."

Woods calls Caterpillar "the picks and shovels story" that is not going away.

Other Industrial Stocks to Watch

During the interview, Woods also offered up some other industrial stocks that warrant attention.

The list includes MasTech Inc (NYSE:MTZ), Dycom Industries (NYSE:DY), United Rentals (NYSE:URI) and Comfort Systems USA (NYSE:FIX).

"There are so many great stories in the picks and shovels. If we are still in early innings in AI, we are still in the early innings of the data build," Woods tells Benzinga.

Woods said backlogs remain strong and pricing power is also strong for industrials and companies connected to AI right now.

"They’re crushing in all metrics and the stocks are just picking up on that now."

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