Cummins Inc. (CMI) Shares Soar 3.42% on Data Center Demand

Cummins Inc. (CMI) shares rose 0.73% intraday, reaching their highest level since March 2025, marking a fifth consecutive day of gains and a 3.42% increase over the past five days.

The strategy of buying CMI shares after they reach a recent high and selling them one week later delivered moderate returns but underperformed the market. The strategy’s CAGR was 11.78%, trailing the benchmark by 25.68%. With a maximum drawdown of 0.00% and a Sharpe ratio of 0.46, the strategy had minimal risk but lacked sharp performance, as evidenced by its 32.34% return versus the benchmark’s 58.03%.

Cummins Inc. is expected to benefit from the expansion of data center construction, which could drive demand for its power solutions. This growth in data centers is likely to boost the company's revenue and profitability, making it an attractive investment option for those looking to capitalize on the tech industry's expansion.

Cummins has recently increased its quarterly dividend by 10% to $2.00 per share, which is likely to enhance investor sentiment. This dividend increase reflects the company's strong financial performance and its commitment to returning value to shareholders. Investors often view dividend increases as a positive sign of a company's financial health and future prospects.

Analysts have grown bullish on Cummins' near-term earnings potential, as evidenced by its Earnings ESP of +5.46%. This positive outlook suggests that the company is expected to exceed earnings estimates in the coming quarters, which could further drive stock price appreciation. The improved Relative Strength (RS) Rating also indicates that Cummins' stock performance is improving relative to other stocks in its sector.

The price target for Cummins has been raised to $355 by Baird, and J.P. Morgan maintains a Hold rating with a price target of $375. These price targets reflect analysts' confidence in the stock's future prospects and suggest that there is still room for growth. Investors should consider these price targets when making investment decisions, as they provide valuable insights into the stock's potential upside.