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Trade Wars
Caterpillar’s Surging Stock Is Fueled by AI, Not Yellow Excavators
Caterpillar’s power and energy business has become its fastest-growing sales segment, helped by surging investments in data centers to support AI projects. It expects the segment to help accelerate annual sales growth by 5% to 7% through 2030, up from a 4% average in recent years. Investors have been bullish on the manufacturer’s growth prospects, lifting it to become a top performer on the Dow this year. Some data-center developers are shopping for electricity beyond regulated utility companies and regional power networks where supplies are increasingly tight. They are starting to build on-site power plants and ordering scores of electric generators.
The company is planning its biggest factory spending in about 15 years to capitalize on demand in building AI infrastructure. The Texas company is spending $725 million at its Lafayette, Ind., plant to make more piston-driven engines for generators. Separately, it wants to more than double the production capacity for turbine engines by 2030. Caterpillar’s investments will build on a lineup of products used to supply backup power at commercial buildings and to move natural gas through long pipelines. Its turbine-engine brand Solar produces the largest generators. The base price for Solar’s 38-megawatt generator is more than $26 million.
Read more at The WSJ
After a Year of Blistering Growth, AI Chip Makers Get Ready for Bigger 2026
Driven by the explosive growth of artificial intelligence, the largest semiconductor companies in the world recorded more than $400 billion in combined sales in 2025, by far the biggest year for chips on record. Next year promises to be even bigger. Yet the blistering pace of growth, fed by what CEOs and analysts describe as “insatiable demand” for computing power, has created a host of challenges, from shortages of vital components to questions about how and when AI companies will be able to generate reliable enough profits to keep buying chips. Microsoft said in October that it would double its data-center footprint in the next two years, which means chip makers are likely to see added revenues in 2026, according to analysts, with expectations even higher than this past year.
Data-center operators, AI labs and business customers have clamored for Nvidia’s advanced H200 and B200 graphics processing units. Google’s increasingly sophisticated custom chips, known as TPUs, and Amazon’s Trainium and Inferentia chips, both of which compete with Nvidia’s GPUs, are also scooping up customers, while software developers such as OpenAI are joining with custom designers such as Broadcom to design their own chips. Advanced Micro Devices, a half-century-old maker of gaming, personal computer and data-center chips, is launching a GPU in 2026 that represents its first major challenge to Nvidia’s AI processors.
Read more at The WSJ
Software Glitches Fueled Automaker Recalls In 2025
Although most automakers are working to launch new software-defined and connected vehicles, some of the biggest recalls of 2025 highlight the challenges that OEMs have faced integrating software into their vehicles.
- Ford Motor Co., for example, recalled over 1 million vehicles in May for backup camera software that caused blank screens or distorted images when shifting into reverse. The automaker also recalled 355,000 F-Series trucks over software errors, which followed another recall of 230,000 Bronco and Bronco Sport SUVs for similar problems.
- In October, Toyota Motor North America, recalled over 1 million vehicles for backup camera faults blamed on software errors. It followed a September recall of almost 400,000 Tundra and Sequoia trucks for software issues.
- In November, American Honda Motor Co. recalled nearly 257,000 Accord Hybrid models for a software error leading to a loss of drive power.
- General Motors also recalled over 41,000 electric Cadillac Lyriqs in June for software errors causing blank instrument cluster displays.
- Stellantis’ FCA US division also recalled over 72,000 Ram 1500, 2500 and 3500 pickup trucks earlier this month for software problems.
Read more at Ward’s Auto
Industrial M&A Ramps Up As Tariffs Settle In, Interest Rates Drop And Funds Are Flush
Industrial M&A activity may have gotten off to a bumpy start in 2025, due to tariffs and other factors, but experts say deals in the sector are increasing with significant potential in the years ahead. Private equity firms are sitting on long-held portfolio companies and untapped capital, strategic buyers are looking to appease investors’ growth expectations, aging business owners are looking for exit plans and domestic manufacturing is receiving renewed interest as global supply chains become more complex. As the market adjusts to this regulatory shift, experts are also seeing tariffs and the push for federal domestic manufacturing begin to drive certain deal plans.
Ellen Clark, a managing director at PMCF who co-leads the firm’s industrials team, said many companies consider acquiring an existing operation in the U.S. to be a less risky and more direct path than building a new plant. “I’m having more of those conversations again where foreign companies are calling and talking about their acquisition strategies [and asking if] we have companies, and do we want to represent them on the buy side,” said Clark. “The same thesis we had a year ago is still relevant, which is tariffs mean that you’re better off having a foothold in the U.S.” Clark said M&A ripple effects are also occurring in sectors that support domestic manufacturing, such as HVAC, janitorial and facilities management.
Read more at Manfuacturing Dive
Howmet Purchase Adds More Aero Fasteners
Earlier this month Council of Industry member Howmet Aerospace Inc. agreed to purchase Consolidated Aerospace Manufacturing LLC from Stanley Black & Decker, and will add the designer and manufacturer of precision fasteners, fluid fittings, and other products for aerospace and defense markets by mid-2026. Consolidated Aerospace Manufacturing - which includes brands like Aerofit, Bristol, QRP, and Voss - supplies commercial aircraft programs (including Airbus and Boeing) and defense aircraft programs with products like quick-release pins, latches, and tube assemblies, produced at multiple U.S. locations.
Howmet’s existing portfolio includes various aerospace fastener products, including cast-in types produced by investment casting. These include specialized bolts, nuts, or inserts that are integrated into a larger component during the casting process to create complex, lightweight parts in aerospace alloys that may be difficult to produce by machining. The current version of Howmet was formed in 2020 following a spin-off from Arconic Inc., the former Alcoa Inc.’s aerospace division. It continues to be an important investment casting producer of superalloy and titanium alloy components for aerospace and industrial gas turbines; as well as a major supplier of forged aluminum, titanium, and superalloy parts for aerospace structures and aluminum wheels.
Read more at Foundry Magazine
Tesla Sees Quarterly Deliveries Falling As Lack Of Tax Credits, Competition Sap Demand
Tesla deliveries were expected to fall in the fourth quarter, as the loss of U.S. tax credits and rising global competition sapped demand even as the company rolled out cheaper versions of its best-selling electric vehicles. The decline would follow plummeting sales in the first two quarters of the year when CEO Elon Musk faced a backlash for his political rhetoric. Third-quarter sales got a boost as buyers rushed to lock in tax credits before they expired in September. Still, Tesla is likely to report its second straight drop in annual deliveries, with this year's decline steeper.
In October, Tesla launched stripped-down versions of the Model Y SUV and Model 3 compact sedan called Standard. It will face competition from affordable EVs made by Chevrolet and Ford, which are expected to hit the market over the next two years. Analysts expect Tesla's sales to recover next year, as the Standard versions, priced about $5,000 below previous base models, help the company defend volumes in Europe and Asia, where Chinese EVs are gaining ground. The company is expected to report fourth-quarter and annual production and delivery numbers on Friday.
Read more at Reuters
Nvidia In Advanced Talks To Buy Israel's AI21 Labs For Up To $3 Billion, Report Says
Nvidia is in advanced talks to buy Israel-based AI startup AI21 Labs for as much as $3 billion, the Calcalist financial daily reported on Tuesday. Calcalist said AI21 has long been up for sale and talks with Nvidia have advanced significantly in recent weeks. It noted that Nvidia's primary interest in AI21 appears to be its workforce of roughly 200 employees, most of whom hold advanced academic degrees and "possess rare expertise in artificial intelligence development." Calcalist said the deal to buy AI21 is estimated at between $2 billion and $3 billion.
Nvidia, which has become the most valuable company in history at more than $4 trillion, is planning a large expansion in Israel with a new R&D campus of up to 10,000 employees in Kiryat Tivon, just south of the port city of Haifa - Israel's third-largest city. Nvidia CEO Jensen Huang has described Israel as the company’s "second home." Nvidia has said that when completed, the campus will include up to 160,000 square meters (1.7 million square feet) of office space, parks and common areas across 90 dunams (22 acres), inspired by Nvidia's Santa Clara, California, headquarters. Nvidia expects construction to begin in 2027, with initial occupancy planned for 2031.
Read more at Yahoo Finance
Elon Musk Envisions Humanoid Robots Everywhere. China May Be The First To Make It A Reality
Billionaire Elon Musk has put humanoid robots in the spotlight this year, positioning them as central to Tesla’s valuation, which he thinks could hit tens of trillions of dollars. But Tesla is yet to sell its flagship humanoid robot Optimus. Instead, it’s likely a slew of Chinese companies that will beat Tesla to the punch and begin ramping up production of robots in 2026, as Beijing puts the technology at the center of its strategic plans. Humanoid robots are designed to be shaped and move like a human. Artificial intelligence algorithms power their abilities along with complex hardware like semiconductors. Proponents say they could be used across various settings, from factories to hospitality and even in the home.
Over the past few years, China has made robotics a key focus of its tech strategy, unveiling plans to create supply chains and mass production of the machines. For China, humanoid robots represent an opportunity to address labor challenges in the world’s second-largest economy as well as advancing Beijing’s quest for tech supremacy. “China’s push into humanoid robotics development is driven by a combination of addressing demographic pressures, driving the next horizon of economic growth, and strengthening its role in global competition,” Karel Eloot, senior partner at McKinsey & Company, told CNBC.
Read more at CNBC
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