CNBC’s Jim Cramer suggested Wednesday that companies outside the tech space would also benefit from some form of involvement in the data center boom, citing manufacturer Caterpillar’s recent earnings as an example.
He said the Fed’s decision to cut interest rates by 25 basis points is positive for a wide range of businesses in the “real economy,” a term he used to lump together certain types of business activity beyond the AI boom. But he suggested the latest rate cut may not be enough to really boost stock prices.
“This rate cut is great news for the so-called real economy,” Cramer said. “But as you can see with Caterpillar, the best-performing companies in the real economy are the ones that also have a huge impact on the data center economy.”
industrial equipment manufacturer caterpillar The company reported better-than-expected results on Wednesday, sending its stock up more than 11% to a new 52-week high. The quarter was driven in part by strong demand for power generation and data center equipment.
Kramer said former Caterpillar CEO Jim Umpleby’s focus on turbines and power equipment helped transform the company from a “constant cycle of booms and busts” to a “long-term growth story.” Caterpillar construction products are needed to build a variety of things. Kramer said, but he suggested that electricity is especially valuable as data centers become more popular.
He compared Caterpillar to Generaccreate a backup generator. He said the company has some exposure to data centers, but “clearly not enough,” noting that the stock fell Wednesday after unimpressive earnings.
For Cramer, Generac wasn’t making “enough bets on the data center.”
“Many companies in the so-called real economy have only themselves to blame for missing out on the data center boom,” he said.
Caterpillar and Generac did not immediately respond to requests for comment.
