Cummins Inc. (NYSE: CMI) shares have risen nearly 12% in August following the company’s second-quarter earnings report, which exceeded analyst expectations on both revenue and earnings. CEO Jennifer Rumsey highlighted growing demand in the data center sector as a significant driver of growth, transforming Cummins from a traditional industrial player into an energy-infrastructure provider for the digital economy.
The company acknowledges that new tariffs may add tens of millions in annual costs, particularly due to its longstanding operations in China and India, but considers these impacts “immaterial” to its full-year guidance. Currently, Cummins shares are trading around $401, significantly above their 50-day moving average of $360, with a Relative Strength Index (RSI) near 65, suggesting potential overbought conditions, which could lead to a pullback toward $295-$300.
Despite the uncertain short-term outlook, analysts indicate that Cummins’ exposure to the rapidly growing data center market could represent a long-term strategic advantage, although investors are cautioned to balance the immediate risks against potential future gains in the evolving AI infrastructure landscape.
