You Can Do Better Than Tesla: 3 Industrial Stocks With More Upside

As Tesla faces challenges like shrinking margins and a weakening EV market, some investors are considering alternative industrial stocks for better potential returns. Caterpillar (CAT) has been gaining traction due to its growing role in the artificial intelligence (AI) sector. The company's latest earnings show a 17% increase in revenue to $20.7 billion, driven by a 75% rise in power-generation revenue.

Additionally, Caterpillar boasts a substantial $78 billion order backlog, more than double that of the previous year, indicating strong future prospects. The company's operating margin also improved to 20.4% from 17.3% a year ago, thanks to favorable pricing. Lockheed Martin (LMT) is another compelling choice, being a leading defense contractor involved in producing F-35 fighter jets and missile interceptors.

With the war in Iran, ongoing conflict in Ukraine, and a proposed $1.5 trillion defense budget, Lockheed Martin's order book has surged to a record $292 billion, marking a 27% increase. This expansion is fueled by a $52.5 billion contract for PAC-3 missile interceptors. Finally, GE Vernova (GEV) stands out as a key player in the power grid sector, manufacturing gas turbines and equipment for electricity transmission.

The company's revenue grew by 27% to $12.6 billion in the last quarter, with a 25% increase in the Power division and a 51% surge in Electrification revenue. Their order book has nearly doubled at $197 billion, with power demand continuing to rise and customers eagerly awaiting equipment. Compared to Tesla, which has declined 13% so far in 2026, Lockheed Martin and GE Vernova have both outperformed, rising over 20%.

Caterpillar has also seen a modest 6% gain, which is attributed to recent post-election bearish sentiment around data center construction. Analysts believe these industrial stocks outshine Tesla, making them attractive options for investors seeking strong growth in the industrial sector.