Smart Investors Are Getting RICH as the Dollar Collapses (Here's How)

The value of the dollar is reaching new lows, but that means opportunity for some exporters. Joining us today is market beat analyst Chris Marotch with a list of three US exporters who are printing money as the value of the dollar drops. So Chris, we're going to get into these three names and why they are benefiting from this. But first, let's just talk about the state of the US dollar. What has been happening to the value of the dollar? >> Well, what's been happening to the dollar has been in decline. It's down about 10% since January of 2025. And that's putting it down at levels that it hasn't been at since 2022, which is right around the time when interest rates started ticking back higher. >> That down dollar no doubt has a lot of implications for many different sectors of the market, many different stocks in the market. And we're going to get into that in a minute. But I think the first question most people watching probably have is why is the dollar dropping right now? And we're not necessarily going to dive into the full, you know, long discussion we could have on that fact alone, but in general, what are some of the reasons that we are seeing the dollar declining right now? >> Yeah, I think there are two reasons. And I'm not going to try to get too wonky here, but it's important that investors understand what's actually happening versus maybe some of the hyperbolic commentary that you might get, you know, from the financial press and certainly from YouTube. One of the key reasons is structural and one just has more to do with market mechanics. So the structural reason really comes down to what's been termed the Mara Lago accord which is the Trump administration's fervent desire to focus on restructuring the global trade system and that means tariffs. Now why are they doing this? Well because the the administration believes that the dollar has been overvalued for decades and it's led to chronic trade deficits. The proof of that was that in 2024 the US goods trade deficit hit a record of 1.2 2 trillion which was 175% larger than it was in the year 2000. So unquestionably there is some truth to that statement. The administration obviously has been taking steps to try to level that playing field and that's one of the reasons why the US dollar is going down. Now having said that there is another reason there has been resilient global growth and that's dampened demand for dollar assets as a safe haven currency. But here's how that's working. Foreign central banks and some institutional investors they've been selling US treasury bonds which are denominated in dollars. They're raising their capital they can put into their own markets. when they sell the treasuries, they get dollars and then when they convert those dollars into their own home currencies, that's bearish on the dollar. And so it puts upward pressure on their currency, it deflates the dollar a little bit. Analysts are saying this type of thing can go on for maybe the next couple of years. You know, as foreign countries look to diversify away from the dollars. However, JP Morgan Chase has commented that in the long run, this could actually create a situation that's bullish for the dollar because eventually these countries are going to want to start buying treasuries again. And when they do, they're going to probably find, you know, that those dollars are going to be a lot more expensive to buy because there's probably not going to be as many of them. And so that supply demand will will tip in favor of the dollar. >> Yeah. so many different theories and ideas and economists weighing in on why the dollar is declining right now. And the this video is not arguing about the why. You can definitely do that in the comments though. I'd love to hear your thoughts on why the dollar is dropping, whether it's a good thing or a bad thing. Throw those in the comments. But what this video is really about today is talking about are there actually some companies in the market that are benefiting or are set up to benefit from a declining US dollar? And that is more of the list that we are looking at today. And Chris, I know you have three names for us. Let's talk a little bit about which sectors specifically you're looking at that could benefit from a declining value of the dollar. >> Well, two areas that I was looking at were heavy machinery and industrials. The the United States exports over 57 billion dollar in industrial machinery annually. And so when you have a cheaper dollar, it makes it gives these foreign countries even more of an incentive to purchase US industrial equipment. And >> those are exactly the kind of companies that we are going to get to in this list today. The three names that you have for us are all big exporters, but they're also doing well in the US largely because of the data center demand and the buildout. If you're interested in some of those AI infrastructure stocks that are seeing a huge surge, make sure to check out this free article on marketbeat.com right now. You can scan the QR code or click the link in the description. It's a list of five AI infrastructure stocks that the smart money is buying right now. Again, scan the QR code, click the link in the description to get that full list right now on marketbeat.com. All right, Chris, let's get to your list and the first company you have for us today. So the first company I have on the list is Caterpillar. Ticker symbol is CAT. Many investors are familiar with this stock. The story here with Caterpillar, most investors know by now. Company had a great quarter. I mean just a great quarter. Revenue was up 22% to 17.4 billion. They beat on the bottom line. They came in with adjusted EPS of $5.54. They deployed more cash for uh share buybacks and dividends. It was just a great quarter. But the key thing that I think investors need to pay attention to here is there was a lot of oxygen spent on saying this was because of demand for data center buildout in the United States and that is true. This is where it becomes an interesting story with regarding the US dollar. Right now Caterpillar generates about half of their revenue growth is coming from all of their international sales. That's Europe, that's Latin America, that's Asia. And that's where the story is really coming in. They're seeing heavy demand. Yes, not only in the United States with the data centers, but they're also seeing heavy demand in those international markets as well, which we said at the beginning, you're starting to see those economies start to expand as well, and they need to build out their infrastructures. Yeah, that international growth piece is the thesis for this list today is talking about the companies that are benefiting from a down dollar in the form of exports and clearly Caterpillar is doing very well in the US but also the exports are a huge part of what this company does. So let's talk about specifically in this earnings report that it was again so impressive. The numbers in this report are great. How much of that growth uh is coming from those international exports? The way they break it out in their in their press release was they're they're saying that about half of the growth came from international. There still a large part of the growth comes from inside the United States, but when you look at all of their international segments, that's where a lot of the growth is coming from. And again, that's just very encouraging for shareholders because it's not just a US domestic story. >> Yeah, this is a stock that's been around for forever. And I know we have talked about it before on the channel almost over a year ago. It was on a recommendation. I believe it was a video with Thomas talking about this company could see a lot of demand because of that AI buildout. And now we're seeing that unfold. Caterpillar stock up 180% in one year. Again, for a very solid company that's been around for a long time, that's explosive growth for a company of of this size and longevity. So, let's talk about getting in as an investor right now. Is there still more growth ahead? We saw a great earnings report. Now, how much more growth are analysts and people predicting, you know, in over the next few quarters for Caterpillar? >> You're probably not going to see that uh, you know, 180% growth that you saw in the last 12 months, but since the earnings report, you're already seeing analysts raising their price targets. Now, as we're taping this video today, Caterpillar is trading right under $900. It's trading right around $896, but I'm looking at some of the analyst forecast. HSBC on May 5th boosted their target from $850, which again, that's right about where it's trading now, and they boosted their price target up to $1,100. Truest Financial on May 1st set a target of $1,43. Argus on May 5th went from $820 to $9.90. So you're seeing price targets for this stock go up and that suggests that there is still some upside if you're getting in on the stock even at this elevated level. >> Clearly there's some strong expectations for growth here. But the big question I have for Caterpillar because so much of their growth story is tied to the AI data center buildout is how long could this growth last? Is this going to be once those data centers are built? Do you really need the heavy equipment that Caterpillar provides once these data centers are up and running? It's not quite the same story as some of those components of the AI infrastructure buildout that will need to be upgraded and replaced once you've dug the hole and you've got the themes and supports in place. It's there. And so do you think that this is a more short-lived growth story for Caterpillar or is there some some length to how far AI data center growth is going to support Caterpillar's growth as well? I >> I think that's a fair question, Bridget. I think the answer is yes, there's going to come a point in time where the data center halo such as it is will start to lose its shine, but that's not going to happen for a little while yet. I mean, we've already heard from the hypers scalers this earning season and they keep saying they're they can't build these fast enough. So, it's a fair question for investors to wonder about. Right now, I think the two things investors need to know, there is still growth to be had in the stock in the next 12 months. It's probably not going to be at that 180% level that it was in the last 12 months, but there's still growth to be had there. You're collecting a dividend along the way. This is a very safe sleep at night stock. And again, you're looking at a company that's getting that growth not just in the United States, but they're getting it overseas as well. As long as that dynamic stays the same, that looks very good for Caterpillar. >> All right, let's move on to the second stock on your list, and this is another incredibly impressive earnings report. >> Yeah, that's John Deere. If we said Caterpillar had a great quarter, well, guess what? deer said, "Yeah, we we did just we did just about as well as they did." So, they reported in February, they came in at $242. The street was expecting $1.90. They came in with 9.6 billion in revenue. Street was expecting 7.5 billion. So, again, just just a great earnings report. 40% of the company's revenue is coming from outside the United States. That's huge because remember, we just said their number was 9.6 billion. And we're saying now 40% of that is coming from outside the United States. They have a particularly strong presence in Latin America, which accounts for about 5.5 billion in annual sales. That's not likely to come down. The company is also making this transition into precision agriculture. That's an AI tiein for this company. In addition to the fact that like Caterpillar, Deer's equipment is in demand for the whole data center buildout. So again, multiple catalysts coming in with deer. Again, just a great earnings report and it looks like more upside to come. >> Yeah, this is the one where you look at the chart and uh Caterpillar had that big jump up almost 25% in a month after that solid earnings report. John Deere has a super solid earnings report and it hasn't really done anything yet. Why do you think that is? >> I think timing is everything. And you know, deer's report came out in the middle of February and they've got another one coming out at the end of this month, which will be something for investors to watch because you remember what was going on in midFebruary. The market was sliding because everybody was had the fear of it's the AI bubble. The hyperscalers aren't going to hold to their capex spending. And instead, what we've seen this earning season is the exact opposite. You've seen the companies like Microsoft and Amazon and Meta say, "No, no, no. We're actually increasing our capex commitments cuz we can't build the data centers fast enough to keep up with the demand. So I think you're going to see a very interesting earnings report, one that investors are going to want to pay attention to when deer reports which is coming up on May 21st. >> Now this is a company I very familiar with. I am a farm kid grew up my grandma had a John Deere kitchen. You know the whole theme of the kitchen was John Deere. So very familiar with the company is right in the Midwest where Marketbeat is headquartered too. But the thing about John Deere is it's it's historically been known as the American farmer company, right? Every US farm has a green tractor out on it. But the thing is uh US farmers are struggling right now. And so the the story around the Midwest right now is nobody's going out to buy a new tractor right now because their earnings this last harvest were not great. Prices for their harvest was not good this year. And so there's that piece of the story for John Deere, but it seems like the growth story is in other areas than the American farmer. There's the exports happening to the other countries where the agriculture story is growing more. And then there's that AI piece of the story. So I'm curious to see is the the thesis for growth for John Deere shifting away from that American farmer and just growing to to more potential markets and consumers. >> I think it's more the latter. I think they are expanding. They're expanding their revenue base into other markets. And again, that's a dollar story. But I think there's one component of this, Bridget, and this is a good time to bring this up. There's another component to the dollar story that could even be a bigger tailwind for some of the stocks that we're talking about, and that is the possibility that the Federal Reserve will actually cut rates. Now, I know that's a topic that a lot of people are going to debate one way or the other. I happen to be in the camp that believes that the Fed is going to cut rates at least one more time, if not more, before the end of the year. We're not going to go into my reasons why right now, but I believe that's going to happen. And when that does, that is actually bearish for the dollar because, you know, it weakens demand for our treasuries. The flip side of that is that could be a boon for just some of these areas like the US farmers that are probably desperately needing rate cuts. And that could be something that sparks something with John Deere, which is moving in aggressively into an area called precision agriculture, which is essentially they're making equipment that's helping farmers be more efficient at getting the type of yield they need to get. Yeah, there's so much whatifs to go with this company and there's a lot of economic and geopolitical factors and really the main industry that John Deere supports. So, it's an interesting stock. I do agree with you when you're looking at this chart saying it had such a strong earnings report if this next report coming up later this month is just as strong. This stock should grow higher from where it is today. It hasn't seen much growth at all in the last month or so. So, this is the one I I'm going to add to my watch list. If you watch our shows, you know I I like to add one stock every video to my paper watch list. It's marketbeat.com/bid or you can scan the QR code to follow along with some of the names that we talk about on this channel. And I really like the entry point in John Deere right now and the thesis for for more growth, especially this international growth for John Deere, too. So, I'm excited to see how this stock moves over time and following the watch list is a great way to do that. All right, let's get on to the third and final stock you have on this list today of a company that actually has some opportunity with a down US dollar. >> The company I'm talking about here is Newor. It's a steel company uh as many investors are familiar with. The ticker symbol is NUE. Now, to be fair, this is more of an indirect play on the US dollar weakening. It's not so much an export story. The company did show in their last quarter that they had record numbers of products leaving their mills, which is great. But the real story here with Newor is, as we went back at the beginning and said, there's the structural story of the Trump administration's entire strategy or at least a significant part of the strategy behind the tariffs was to level this playing field for US manufacturers. Well, there's almost no industry that epitomizes that more than the steel industry. And what's happening there is the tariffs that are in place are making it more expensive for countries to export steel from other countries and it makes it more advantageous for them to export from the United States. That's the tailwind that Newor is experiencing right now. It showed up in their earnings report which just came out at the end of April. They had a strong beat on EPS. They came in at 323. Street was expecting 282. Revenue came in at 9.5 billion, which was a beat on 8.8 billion. Again, just a very strong report from the company. Analysts right now still give the stock about 7 12% upside. And that doesn't take into consideration some other price targets which are higher than that. Yeah, this company has seen incredible growth in the last month, up 30%, but it was on such a good upward trajectory for a while there and then it was down with the rest of the market in that February spring time frame, that downtrend that it saw, that pullback it had that have anything to do with what was actually happening with their revenue and this company or was that all just a reaction to what was going on in the broader market at that time? I believe it was really just a reaction of what was going on in the broader market. And again, I think it was that idea that new core does fit in to this data center narrative because obviously if you're building these companies, you're you're building these data centers, you're going to need steel. And so there was probably some concern that some of that spending was not going to happen. I think people are now seeing that that's not true. And again, it just benefits a company like New Core that's in that position. Now, having said that, should investors be buying the stock right at the level it's at right now? They if they're not already in the stock, they may want to wait for a little bit of a pullback. It is trading near its all-time high. It was just at its all-time high. It's pulled back a little bit from that. They may want to wait to see if they get a better entry point. But keep in mind, even if they decided to get in, one of the benefits of buying a blue chip company like Newor is this is dividend king. They've been increasing their dividend for 52 consecutive years. Even if it's something where you get into it and you maybe have to average down into it a little bit, you're still getting paid a dividend while you wait. >> One thing that is so true for all of the names on this list today is that we we're seeing that this US dollar that's down having an impact on their international sales and that we are seeing their exports increasing and that is impacting the company, but it's also coming at the same time as this AI growth story. So, you can't discount the impact that that is having too. You clearly talked about it a lot in this video, but do you think that there's something to be said about these blue chip companies that have been around, you know, for more than 50 years finally seeing this kind of tremendous growth because you have multiple factors happening at the same time? If it were just the AI story, would we see the same growth? If it were just the international story, would we say see the same kind of explosive growth that these longtime companies are now seeing? >> Absolutely not. And I I think you would if it was just the data centers, they'd still have probably pretty explosive growth. If it was just the international story, probably not so much. But that's the exciting thing about all three of these opportunities. These are blue chips companies. These are companies that a lot of investors might say those are too boring. They're too expensive. You know, they they got too high of a share price for people to get involved with. But right now, this has been a really good time to be in on these stocks. And as we've seen, even with a stock like Caterpillar that's had this 180% growth over the last year, there's still upside to come. and you're getting it with companies that can't be any safer from a balance sheet perspective. These are really solid sleep good at night stocks. You're not going to have to worry about, you know, a lot of the the balance sheet volatility that comes when you're buying some of the more speculative names, let's just say. >> And if you're worried at all about that question of how long will this boost last for these three names, make sure to watch this video. I just talked to Thomas Hughes about the five stocks he's buying after this earning season, and he talks a lot about the long-term growth case for the AI data center buildout. You can watch that full interview