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The Tesla of Farming? -- Should You Buy John Deere Stock Now?

By Eric Cuka – Jun 25, 2021 at 10:30AM

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Disruptive technology is changing the face of agriculture. Is John Deere the future of farming?

Believe it or not, Deere & Company (DE -3.44%) currently employs more software engineers than mechanical engineers. How is this possible? The farming industry is experiencing significant disruption. Innovative technology is enabling what is called "precision agriculture" to come to fruition. Farmers are able to leverage technology to monitor their crops in ways that were once unfathomable. John Deere's next-generation machines use artificial intelligence (AI) to exponentially increase efficiencies, enabling farmers to reap increased crop yields with less work and lower costs. 

Deere does not manufacture electric vehicles like Tesla (TSLA -4.59%), but you may be surprised to hear it is working on autonomous electric tractors, semiautonomous tractors, autonomous drone sprayers, and much more. Is John Deere the Tesla of agriculture? 

In July 2020 John Deere hired Jahmy Hindman as the company's first chief technology officer in its 184-year history. Did that number surprise you? That's right, John Deere was founded in 1837. Hindman leads Deere's Intelligent Solutions Group, and his role is responsible for building out the company's tech stack, which includes connectivity, embedded software, data platforms, and applications. 

ARK Innovation's autonomous ETF, ARK Industrial Innovation (ARKQ -2.82%), consists of approximately 2.5% of Deere and Company. Given that it's a 184-year-old blue chip company, many would be surprised to think of John Deere as an innovative technology company, but the business is pivoting into a new era, and it could be an opportunity for a long-term investing portfolio. 

John Deere's stock pays just over a 1% dividend, and the current P/E ratio is under 23. The stock price recently pulled back from an all-time high of $400.34. Should you buy John Deere stock now? Please watch the below video for a detailed breakdown of the stock and opinions on the share price.

Eric Cuka owns shares of Deere & Company and Tesla. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policyEric is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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Stocks Mentioned

Deere & Company Stock Quote
Deere & Company
DE
$334.22 (-3.44%) $-11.91
Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$275.33 (-4.59%) $-13.26
ARK ETF Trust - ARK Autonomous Technology & Robotics ETF Stock Quote
ARK ETF Trust - ARK Autonomous Technology & Robotics ETF
ARKQ
$46.57 (-2.82%) $-1.35

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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