One stock on Josh Brown's list is a 'double AI beneficiary' that just climbed to all-time highs
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.)
Josh — We're revisiting an old favorite because it's just broken out again, and not all of you have been with us every week since the beginning of the column. Deere is a "double AI beneficiary" stock and the market is starting to figure that out.
On one side, the infrastructure buildout is driving demand for construction and industrial equipment. On the other, the company itself is one of the most sophisticated deployers of AI technology in any industry. The 8R is a fully autonomous tractor.
No operator. It navigates, it works the field, it runs on its own. See & Spray uses computer vision to distinguish weeds from crops and only sprays the weeds, cutting herbicide costs in half. As Sean lays out below, this is not a future promise.
The technology is in the field and it is scaling. The AI wolf has teeth. We've written about Deere four times now. The first time was June 2025, when we called it an AI wolf in sheep's clothing.
Still one of my favorite titles. Back then, the technology was real, but the stock was cheap. Now the stock is at an all-time high, and the ag recovery Sean describes below hasn't fully shown up in the numbers yet. Management called fiscal 2026 the bottom of the cycle.
Investors are not waiting around to confirm it. Price leads fundamentals. Simple as that. Sean's got the fundamentals below. I'll be back with some technical commentary and risk management.
Best Stock Spotlight: Deere & Co. (DE) Sean — As Josh noted, this is our fourth time writing about Deere. The first was a spotlight on June 5, 2025 titled "An 'AI wolf in sheep's clothing' with a great entry point for investors" . We came back to it on July 21, 2025 when it broke its 50-day, and again on April 20, 2026 , when the chart was a mess.
DE first made the list on May 8, 2025 at $489 and is up 42.5% since. It came off the list on Sept. 3, 2025 after confirming a downtrend, spent four months in the wilderness, and was added back on January 14, 2026 at $512. It's up 36.4% since that second add and closed at an all-time high yesterday.
In 1837, John Deere cut the teeth off a broken sawmill blade, hammered it into a plow, and made exactly one plow that year — now the company is an AI/robotics play. Who would've thought? The AI story is doing what we said it would in June 2025. Management talks about "See & Spray", its computer-vision system that distinguishes weeds from crops and only sprays the weeds.
Factory-installed sprayer orders with this technology are doubling year over year, about a third of North American sprayers on order for 2027 include it, and customers running it are saving more than 50% on herbicide costs. It's a win-win. Coverage went from one million acres in year one to five million acres globally last year, using this tech.
Roughly 40% of planters now come ordered with the most advanced technology tiers. The machine vision came from Blue River Technology, which Deere bought for $305 million in 2017, and the autonomous equipment from Bear Flag Robotics, which DE bought for $250 million in 2021. The AI wolf is showing its teeth again.
Deere reported fiscal Q3 earnings on August 20 and the stock rose 6.9% that day. Net sales and revenues grew 5% to $12.6 billion and net income was $1.4 billion, or $5.10 per share, up 7%.
Equipment operations operating profit rose 18% to $1.8 billion at a 14.4% margin, with Construction & Forestry carrying the quarter (sales up 18%, operating profit up 84%) and Production & Precision Ag lagging (sales down 6%, profit down 9%).
The margin trajectory through the year is impressive — equipment operations margin has gone from 5.9% in Q1 to 14.4% in Q3, and Production & Precision Ag margin from 4.4% to 13.2%. Management raised full-year net income guidance to $4.75–$5.00 billion and took the equipment operations cash flow forecast up to $5–$5.5 billion.
DE trades at 39x trailing and roughly 30x the $23 consensus estimate for fiscal 2027 EPS, which implies about 26% growth off this year's $18. Baird upgraded the stock to Outperform on Aug. 31 and raised its target to $800 from $640, pointing to an ag inflection with corn futures hitting a three-year high and both corn and soybeans up about 22% this year.
All time highs often scare investors, when in reality, most of the time it's a signal of good things to come. Here's Josh on the important risk levels to watch. Risk management Josh — Deere spent seven months unable to clear its February high.
The stock churned in a wide range all spring and summer, unable to generate any conviction above that ceiling. Then in May it got a real scare, a weeklong sell-off that took it all the way down to the rising 200-day. Buyers showed up exactly where they needed to.
Higher highs and higher lows from there. The stock quietly worked its way back, finally broke through the February high, and didn't look back. It's at $700 now, at an all-time high, with the 50-day rising at $616 and the 200-day at $566.
RSI is 71. That is elevated, but stocks in prolonged uptrends can run overbought for longer than you expect without putting the move in jeopardy. This is not a warning sign. It is a reflection of the strength behind the breakout. Traders can eyeball the rising 50-day at $616 for their sign to lighten up.
That line has been the floor on every meaningful pullback during this recovery and a close back below it would tell you the buyers are not as convinced. I'd use closing prices rather than intraday in this instance. Investors can anchor to the 200-day at $566, which is where buyers proved their conviction in May.
Below that on a weekly close and the uptrend is broken. If that seems too far below, consider these two things: One, it should continue to rise and you'll adjust your stop as it does so. Two, it's the equivalent of a $70 stock falling to $56.
You'd be fine in that case. You'll be fine in this case too. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium.
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