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Michael Burry initiates first-ever short position in Caterpillar after AI rally

Michael Burry initiates first-ever short position in Caterpillar after AI rally

Burry disclosed a bearish bet on Caterpillar at $1,060.98, while a Wall Street analyst argued the machinery group's gains reflect AI-related power demand and resilient core operations rather than pure hype.

Fact Check
Multiple independent sources confirm every element of the claim. CNBC (Burry shorts Caterpillar after it nearly doubled in AI rally of 2026) reports the first-ever Caterpillar short at the exact price $1,060.98 plus bearish positions in Nvidia, Applied Materials, Tesla and SOXX. Investing.com independently reproduces the identical Caterpillar short price ($1,060.98) and lists the other positions, attributing them to Burry's own Substack post. CNBC's official X post directly quotes Burry stating he has never shorted Caterpillar before. The valuation/AI-momentum rationale in the claim matches the reported reasoning.
Summary

Michael Burry said he opened his first-ever short position in Caterpillar at $1,060.98, arguing the heavy-equipment maker has become overvalued after a sharp rally tied in part to artificial intelligence infrastructure spending. Shares closed down nearly 7% on Wednesday after his disclosure and fell as much as 4% on Thursday to about $949, their lowest since mid-June. Burry said Caterpillar had climbed about 172% over the past 12 months and more than 77% this year before he disclosed the trade, pushing its price-to-sales ratio to its highest level in three decades. He also said he had refreshed a bearish position in the iShares Semiconductor ETF, or SOXX, and taken positions against Tesla and Nvidia as part of a broader view that the market is in an AI bubble. Freedom Broker senior analyst Sergey Glinyanov disputed the thesis, saying Caterpillar is benefiting from a structural rise in demand for on-site diesel and natural-gas power systems as AI data centers seek reliable alternatives to an aging grid, while the company's traditional machinery business remains healthy. He said Caterpillar's first-quarter sales rose 22% from a year earlier to $17.4 billion and reiterated a $910 price target, warning the stock's premium depends on hyperscalers continuing to spend heavily on data centers and power infrastructure.

Terms & Concepts
  • short position: A trade designed to profit if a stock or other asset falls in price.
  • price-to-sales ratio: A valuation metric that compares a company's market value with its revenue.
  • hyperscalers: Large cloud and technology companies that build and operate massive data center infrastructure.