CAT's investments are a competitive advantage play for vertical integration rather than financial returns; including their ~11B long-term equity investments at book value reduces the effective valuation multiple from 18x to 17x operating profit.

But what CAT is also doing is that they are adding superchargers to these swapping stations. So the same station can cater to both a battery swapping as well as fixed battery vehicles.

Yeah, I like I think the CAT's investment portfolio I think is more strategic than financial. It helps them to achieve vertical integration. It spans upstream mining companies to downstream automakers and power infrastructure player in the energy storage system.

Their investment in deepseek I believe is a part of their AI data center integration play. Although I think investing in a foundational AI model lab is going to the extreme end of vertical integration.

In terms of valuation, uh it is tricky to value these investments because most of them are private and depending on their stake, they are treated differently from a financial accounting point of view.

I believe the simplest way to look at it is to see the long-term equity investment line item on their balance sheet. So as of last quarter uh this number was about 11 billion. So slightly less than one time operating profit.

So when we look at 18 times the operating profit I did not account for the uh value of these long-term investments. But if we include them at book value then it drops to about 17 times.

But I would categorize these numbers, these investments more as a competitive advantage play through vertical integration and less as a financial investment play.