World’s largest farm equipment manufacturer, Deere, posted its first rise in quarterly profits in 3 years — due to AI-driven construction boom

The company’s construction and forestry segment, which supplies machinery used to build data centres and infrastructure, posted an 18% jump in net sales as AI-driven construction demand surged, even as its core farm equipment business kept sliding.

Quarterly profit came in at US$5.10 per share, above analysts’ estimate of US$4.70 — and up from US$4.75 a year earlier; revenue rose 6% to US$11 billion. After posting Q2 results, Deere raised its full-year 2026 net income forecast to a floor of US$4.75 billion up from an earlier forecast of US$4.5 billion. To be clear, the company’s quarterly results were aided by a one-time US$110 million tariff refund.

For investors, this isn’t a quirky detail about a long-running farm equipment brand — it’s about sector-focused businesses pivoting to meet demands of newly-created industries. And that same push for AI infrastructure isn’t just an American phenomenon; it’s happening across the world and within Canada’s borders. Recently, Ottawa committed C$2 billion through its Canadian Sovereign AI Compute Strategy to build domestic data centre capacity, and private projects are following, including a roughly US$540 million AI-ready data centre under construction in Calgary.

Whether or not you’d ever buy a share of Deere, the factors shaping this brand are the same trends helping to reshape demand for construction labour, equipment and electricity across the country.

What should investors do?

This is not a recommendation to buy or sell Deere (NYSE: DE) or any other stock; it is a reminder to review your investment plan — and act accordingly.

For instance, some investors may be prompted to buy a few shares whenever a stock, like Deere, pops off; however, holding this U.S.-dividend-paying stock matters.

Why account choice matters for US dividend stocks

As a hypothetical, let’s assume a Canadian investor holds C$10,000 of a U.S. dividend payer with a yield in the range of Deere’s current payout, around 1.3%. Held in a non-registered account or a TFSA, a 15% U.S. withholding tax applies to that dividend income. Held in an RRSP or RRIF, the withholding tax doesn’t apply because of the Canada-U.S. tax treaty exemptions.

In a TFSA specifically, that withheld tax is usually gone for good, since a TFSA isn’t treated as a pension plan for U.S. tax purposes (and there’s no tax return through which to claim it back). In a non-registered account, an investor may be able to recover some of it through the foreign tax credit.

Bottom line

Withholding tax is not a reason to avoid U.S. industrials or the AI infrastructure trade broadly. It’s also not a reason to assume Deere is a sure-bet, from an investment perspective. Remember, the company’s core agriculture equipment business is still working through a stretch of higher costs and softer crop prices, and revenue at its mainstay Production & Precision Agriculture segment fell 6% in the quarter. As Chief Executive Officer John May said: this profit marks “the bottom” of that cycle — not the start of a rebound.