Did Deere’s (DE) Profit Slump and AI Pivot Just Recast Its Core Investment Narrative?

Simply Wall St

Tue, February 17, 2026 at 5:07 AM GMT+9 3 min read

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Earlier this week, Deere & Company reported fiscal first-quarter results showing a steep drop in profit and revenue versus last year, even as it maintained its US$1.62 per-share dividend and continued to face tariff-related margin pressures.

At the same time, Deere is pushing ahead with AI-powered autonomous equipment, digital farming platforms, and the Tenna acquisition, aiming to reshape its business mix toward technology and services despite the agricultural downturn.

We’ll now examine how Deere’s push into AI-driven equipment and digital services may influence its existing investment narrative and risk profile.

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Deere Investment Narrative Recap

To own Deere today, you need to believe its shift toward higher-margin technology and services can offset a weaker farm cycle and tariff-driven cost pressures. The latest quarter’s sharp profit and revenue declines underline that the main near term catalyst is execution on precision agriculture and automation, while the biggest current risk remains persistent margin pressure from tariffs and incentives. So far, the Q1 results appear to reinforce, rather than materially change, that balance of opportunity and risk.

The Tenna acquisition stands out as particularly relevant here, because it deepens Deere’s digital and asset management capabilities at a time when investors are focused on how quickly software and data services can contribute to results. Combined with AI-enabled autonomous equipment and Deere’s existing digital farming platforms, it ties directly into the core catalyst of lifting recurring revenue and margins through technology, even as the broader agricultural downturn and tariff headwinds continue to weigh on equipment demand.

Yet beneath the technology story, investors still need to be aware of how rising tariff costs could eventually affect…

Read the full narrative on Deere (it’s free!)

Deere’s narrative projects $45.1 billion revenue and $8.6 billion earnings by 2028. This requires a 0.7% yearly revenue decline and about a $3.4 billion earnings increase from $5.2 billion today.

Uncover how Deere’s forecasts yield a $526.91 fair value, a 13% downside to its current price.

Exploring Other Perspectives

DE 1-Year Stock Price Chart

Five members of the Simply Wall St Community value Deere between US$430 and about US$674.90 per share, reflecting wide disagreement on upside. Against that spread, Deere’s tariff driven margin pressure in a soft North American ag market may play a key role in how its performance ultimately aligns with any of these views.

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Explore 5 other fair value estimates on Deere - why the stock might be worth 29% less than the current price!

Build Your Own Deere Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

A great starting point for your Deere research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Our free Deere research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Deere's overall financial health at a glance.

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_ This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned._

Companies discussed in this article include DE.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

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