Michael Burry says he's shorting Caterpillar for the first time after it nearly doubled in the AI-driven rally of 2026

Michael Burry said Tuesday that he shorted Caterpillar shares at $1,060.98, describing it as the first time he has taken a short position against the company. In his post, he said Caterpillar “jumped out” at him and cast the trade as an overvaluation call tied to the artificial-intelligence investment boom.

He also said the stock had “always done great” for him on the long side in the past.

Burry disclosed the Caterpillar position alongside new bearish bets against Nvidia, Applied Materials, Tesla and the iShares Semiconductor ETF. That lineup is a matter of record from his disclosure.

An interpretation of the basket is that he is positioning against parts of a market rally linked to AI spending and expectations, though he did not publish a detailed valuation model for Caterpillar or identify a specific near-term catalyst for the short.

Caterpillar is an industrial equipment maker rather than a direct AI play, but it can still be linked to the theme through construction tied to data-center and power-project buildouts. That connection helps explain why investors may have treated the stock as an indirect beneficiary of the same capital-spending cycle that has lifted more obvious AI names.

The important point in Burry’s stated rationale is valuation stretch, not a disclosed claim that Caterpillar’s operations are deteriorating.

That distinction matters for how the trade should be read. Based on what Burry disclosed, the short argues that the shares have run too far relative to what the market can justify, while there is no cited evidence here of a sudden breakdown in equipment demand, margins or execution at the company itself.

In other words, the thesis presented is about price and expectations, not an identified operational problem.

The stock’s sharp rise during the 2026 AI rally is part of that argument, but the move alone does not prove fundamentals have detached from reality.

An interpretation consistent with Burry’s comments is that thematic positioning widened beyond chipmakers and software groups to companies seen as adjacent to the buildout, including businesses exposed to large-scale site preparation, energy infrastructure and heavy construction.

If that broadening pushed Caterpillar’s valuation higher faster than its earnings outlook improved, a short seller could see an opening.

At the same time, the trade leaves open several unanswered questions. Burry disclosed his entry price and his view that Caterpillar is overvalued, but not the earnings assumptions he believes are too optimistic, the multiple he thinks is reasonable, or the event that might change investors’ minds.

Without those details, the timing case remains less defined than the directional view.

There is also a clear risk to the bearish thesis. If AI-related capital spending continues to expand into data centers, grid upgrades and other large projects, demand for machinery and equipment could stay firm for longer than skeptics expect, allowing a rich valuation to persist. For now, the confirmed facts are narrower:

Burry initiated his first short in Caterpillar at $1, 060.98 and presented it as a bet that enthusiasm around the AI investment boom has carried at least one industrial beneficiary to an overextended valuation.

Published at 2026-06-30T21:00:51.620253+00:00 UTC

Related Symbols

• CAT — Caterpillar
• NVDA — Nvidia
• AMAT — Applied Materials
• TSLA — Tesla
• Selection note: Story centers on Michael Burry shorting Caterpillar and also explicitly mentions new bearish positions in Nvidia, Applied Materials, and Tesla.

References

• CNBC
• Bloomberg