Have you ever stopped to think about how the world feeds itself? It’s a question that hums in the background of our daily lives, yet rarely takes center stage. I’ve always been fascinated by companies that quietly power the essentials—food, shelter, energy—and turn them into something extraordinary. That’s why I’m diving into an unexpected gem today: a 188-year-old company that’s reinventing itself as a modern titan of innovation. This isn’t just about tractors or plows; it’s about a business weaving artificial intelligence and recurring revenue into the fabric of agriculture, creating a compelling case for investors.
Deere: The Agricultural Giant with an AI Twist
At first glance, Deere might seem like a dusty relic of American industry—think green tractors rolling through endless fields. But peel back the layers, and you’ll find a company that’s anything but stuck in the past. Deere, founded in 1837, has been a cornerstone of agriculture for nearly two centuries. Yet, it’s their recent pivot toward precision agriculture and annually recurring revenue (ARR) that’s catching the eye of savvy investors. This isn’t your grandpa’s farm equipment company—it’s an AI wolf in sheep’s clothing, blending tradition with cutting-edge tech.
A Legacy of Innovation
Deere’s story begins with a blacksmith named John Deere, who crafted the first steel plow that revolutionized farming in the 19th century. That single invention made it easier to till tough Midwest soil, boosting productivity and feeding a growing nation. Fast forward to 2025, and Deere is still at it, pushing boundaries with a focus on smart farming. Their equipment isn’t just metal and gears anymore—it’s packed with sensors, connected to the cloud, and powered by artificial intelligence. This isn’t about replacing farmers; it’s about making their work smarter, faster, and more profitable.
Technology is transforming agriculture from a labor-intensive trade to a data-driven science.
– Agricultural technology analyst
The company’s iconic green and yellow machines are more than a branding choice. The green blends into fields, minimizing visual disruption, while the yellow ensures visibility for operators. It’s a small detail, but it speaks to Deere’s obsession with the user experience—something that carries over into their modern tech offerings.
The Rise of Precision Agriculture
Deere’s Production and Precision Agriculture segment is the crown jewel of its business, accounting for half of its operating earnings. This isn’t just about selling tractors—it’s about creating an ecosystem of connected machinery. Picture this: a farmer sits in a cab, watching real-time data on soil conditions, crop health, and weather patterns, all streamed through Deere’s cloud-based Operations Center. This platform crunches numbers and offers insights that save time, cut costs, and boost yields. It’s like having a co-pilot who never sleeps.
- IoT integration: Deere’s equipment is fitted with sensors that collect data on everything from soil moisture to equipment performance.
- AI-driven insights: Algorithms analyze data to optimize planting, harvesting, and resource use.
- Cloud connectivity: Farmers access real-time analytics from anywhere, making decisions on the go.
This tech-forward approach has turned Deere into a leader in what I like to call the AI of agriculture. It’s not just about selling a product; it’s about offering a service that keeps farmers coming back. And that’s where the real magic happens for investors.
The Power of Recurring Revenue
Here’s where Deere’s story gets really interesting. The company has set an ambitious goal: convert 10% of its revenue to an annually recurring model by 2030. In 2024, Deere reported $51.7 billion in sales. If they hit their target, that’s over $5 billion in predictable, subscription-like revenue. Why does this matter? Because Wall Street loves consistency. Companies with recurring revenue streams—think Netflix or Spotify—command higher valuations because their cash flows are more predictable.
Recurring revenue is the holy grail of modern business—it’s like planting a seed that grows year after year.
– Investment strategist
Deere’s shift to an ARR model isn’t just a buzzword. It’s a strategic move to insulate the company from the ups and downs of the agriculture cycle. Commodities like corn or wheat can be volatile, but a subscription for data-driven farming insights? That’s a steady stream of income, rain or shine.
Financials That Shine
Let’s talk numbers, because they tell a compelling story. Deere’s Production and Precision Agriculture segment is projecting operating margins of 15.5% to 17% for 2025. That’s robust for an industrial company. Analysts are also forecasting 18% EPS growth over the next year, signaling strong confidence in Deere’s trajectory. The stock trades at a 25x trailing P/E and a 23x forward P/E, which is reasonable for a company with such a clear growth path.
| Metric | 2024 Performance | 2025 Outlook |
| Revenue | $51.7 billion | 10% ARR goal by 2030 |
| Operating Margin | ~15% | 15.5%-17% |
| EPS Growth | Stable | 18% projected |
These figures aren’t just numbers on a page—they reflect a company that’s executing on a vision. The combination of high margins and growth potential makes Deere a standout in the industrial sector.
Navigating Tariff Headwinds
No investment is without risks, and Deere faces a notable one: tariffs. Analysts estimate a $500 million pretax impact in 2025, with $400 million hitting in the second half. That’s not pocket change. But here’s the thing: Deere is already taking steps to soften the blow. They’re tweaking their supply chain and adjusting pricing for 2026 and beyond. Plus, with 79% of complete goods and 76% of components sourced in the U.S., Deere is less exposed to global trade disruptions than you might think.
I’ve always believed that great companies don’t just weather storms—they adapt and come out stronger. Deere’s proactive approach to tariffs shows they’re not sitting on their hands.
A Technical Setup Worth Watching
For those who like to dig into the charts, Deere’s stock is showing some promising signs. Over the past three years, it’s only touched its 200-week moving average once on a weekly close, a testament to its resilience. On the daily chart, the 200-day moving average has been a rock-solid support level since November. There was a brief dip below it in April during tariff news, but buyers stepped in quickly, signaling confidence.
A stock that respects its moving averages is like a well-trained horse—it knows where to run.
– Technical analyst
Right now, Deere’s stock has cooled off from its May highs, with an RSI reading in the 50s. That’s a far better entry point than when it was pushing 75 and hitting new peaks. For investors, this could be the sweet spot to jump in, with a stop-loss just below the 200-day moving average to manage risk.
Why Deere Stands Out
What makes Deere special isn’t just its history or its tech—it’s the combination of both. The company has a defensible moat, thanks to its brand, innovation, and scale. Farmers don’t just buy Deere equipment; they trust it. And with the shift to precision agriculture, Deere is building a sticky ecosystem that keeps customers coming back.
- Brand loyalty: Deere’s green and yellow machines are a symbol of quality and reliability.
- Tech leadership: The Operations Center and AI integration set Deere apart from competitors.
- Financial discipline: Strong margins and a clear path to recurring revenue boost investor confidence.
Perhaps the most exciting part is Deere’s ability to blend tradition with innovation. It’s like watching a seasoned athlete learn a new sport—and dominate. This isn’t just a company; it’s a story of adaptation and growth.
Is Now the Time to Buy?
So, why should you care about Deere as an investor? For me, it’s about the bigger picture. Agriculture isn’t going anywhere—it’s the backbone of human survival. But the way we farm is changing, and Deere is leading that charge. Their focus on AI-driven solutions and recurring revenue makes them more than just an industrial stock—they’re a tech play in disguise.
The risks are real—tariffs, commodity cycles, and economic uncertainty could create bumps along the way. But Deere’s management team has shown they can navigate choppy waters. With a reasonable valuation, strong technical support, and a clear growth strategy, this feels like a stock worth watching. Maybe it’s time to plant a seed in your portfolio and see how it grows.
In my experience, the best investments are the ones that surprise you—not because they’re flashy, but because they’re quietly excellent. Deere fits that bill perfectly. What do you think—could this be the next big win for your portfolio?
