Caterpillar (CAT) Surged Amid Positive Sentiments

Diamond Hill Capital, an investment management company, released its “Large Cap Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Markets continued their YTD rally in the third quarter of 2025, with the Russell 3000 Index gaining 8%, bringing the calendar-year returns to over 14%. The portfolio declined and underperformed the Russell 1000 Value Index in the quarter.  In addition, you can check the top 5 holdings of the fund to know its best picks in 2025.

In its third-quarter 2025 investor letter, Diamond Hill Large Cap Fund highlighted stocks such as Caterpillar Inc. (NYSE:CAT). Caterpillar Inc. (NYSE:CAT) manufactures and sells heavy machinery. The one-month return of Caterpillar Inc. (NYSE:CAT) was 14.20%, and its shares gained 39.98% of their value over the last 52 weeks. On November 5, 2025, Caterpillar Inc. (NYSE:CAT) stock closed at $569.30 per share, with a market capitalization of $267.954 billion.

Diamond Hill Large Cap Fund stated the following regarding Caterpillar Inc. (NYSE:CAT) in its third quarter 2025 investor letter:

"Other top Q3 contributors included L3Harris Technologies, Caterpillar Inc. (NYSE:CAT) and Sysco Corporation. Shares of heavy construction machinery manufacturer Caterpillar rose amid positive sentiment around the company’s power-generation business, which is tied to data center growth."

Caterpillar Inc. (NYSE:CAT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 76 hedge fund portfolios held Caterpillar Inc. (NYSE:CAT) at the end of the second quarter, up from 62 in the previous quarter. In the third quarter of 2025, Caterpillar Inc.'s (NYSE:CAT) sales and revenues increased 10% to $17.6 billion. While we acknowledge the potential of Caterpillar Inc. (NYSE:CAT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Caterpillar Inc. (NYSE:CAT) and shared the top stock picks from Bill Gates’s stock portfolio. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.