Baird Equity Research cut Caterpillar to neutral from outperform on Wednesday, citing the moratorium on computing facilities construction that New York issued earlier this month. The stock fell more than 6% in midday trading. Local opposition delayed or blocked 75 data center projects in the first quarter of 2026.
Industrial heavyweight Caterpillar tumbled Wednesday as concerns about the public backlash against data center construction circulated on Wall Street. Baird Equity Research downgraded the stock to neutral from outperform, citing New York's moratorium on computing facilities construction as part of an emerging nationwide trend.
Baird analyst Dobre brought his price target down to $900 from $1,200. The stock is down more than 6% in midday trading, though it remains up more than 30% year-to-date and more than 85% from a year ago.
The pushback is not a partisan story
Caterpillar has performed like a tech stock this year as investors bet on ever-growing demand for construction equipment resulting from the data center buildout. But pushback from state and local governments is gaining momentum across the country. According to CNBC, the Baird analyst wrote that investment hurdles are emerging regardless of a state's politics: "[It's] not a blue vs. red state issue; investment hurdles are emerging everywhere"
Moratoria are only part of it. The debate also spans new laws on water and energy use, rollbacks and rescissions of tax breaks, and increased enforcement of zoning laws.
Blocked projects reach roughly $130 billion
In the first quarter of 2026, local pushback delayed or outright blocked 75 data center projects collectively valued at roughly $130 billion. Maine enacted a full moratorium on data center development in April 2026, and North Carolina, Virginia, and Indiana have pursued similar legislative measures.
That matters because Caterpillar positioned itself as critical infrastructure for the AI buildout, supplying power generation engines, turbines, and construction equipment for hyperscale facilities. It also landed a contract tied to a major Chevron-Microsoft data center project in West Texas, announced in June 2026.
Bitcoin miners have been retrofitting their facilities and signing contracts to host AI workloads, betting that their existing power infrastructure and cooling capabilities give them a competitive edge. Mining revenue as a share of total income for companies securing AI deals is projected to drop from around 85% in early 2025 to below 20% by late 2026.
Most analysts still rate the stock a buy
Dobre expects further multiple compression, particularly should data center policy and regulatory headwinds amplify in the wake of the upcoming election cycle. Despite Baird's downgrade, the stock has been popular with analysts.
According to LSEG, 16 analysts rate Caterpillar a buy or strong buy, with more than 20% upside to the stock's average price target of $945.56.
Sources: CNBC, Crypto Briefing
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