Caterpillar Inc.

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Bearish -65

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

AI-generated analysis

πŸ“‰ Michael Burry has shorted Caterpillar shares for the first time at $1,060.98, viewing the stock as overvalued after an AI-driven rally.

πŸš€ Caterpillar shares gained 86% in the first half of 2026, becoming a top performer in the S&P 500.

πŸ“Š Burry points out that Caterpillar's price-to-sales ratio is at its highest level in at least three decades.

πŸ’» The investor also opened new short positions in Nvidia, Applied Materials, Tesla, and the SOXX ETF.

🌏 Burry attributes the current rally to big spending announcements from Korea, which he sees as a temporary catalyst.

⚠️ He warns that the AI-linked rally is overextended and predicts an impending correction.

πŸ“‰ The Philadelphia Semiconductor Index is trading 65% above its 200-day moving average, reminiscent of the 2000 dot-com bubble.

πŸ—£οΈ Burry stated in a SubStack post that Caterpillar 'jumped out' at him as a specific target for his bearish wager.

Risk Factors
  • Michael Burry has initiated a short position in Caterpillar, signaling a strong bearish view on the stock's current valuation.
  • Caterpillar's price-to-sales ratio has reached its highest level in at least three decades, indicating potential overvaluation.
  • The stock nearly doubled during an AI-driven rally, which Burry believes is unsustainable and nearing its end.
  • Burry identifies Caterpillar as a primary beneficiary of the AI investment boom that he expects to reverse.
  • Broader concerns about semiconductor valuations are highlighted, with the sector trading at levels seen only during the dot-com bubble.
Full Analysis
Famed investor Michael Burry has initiated a short position in Caterpillar Inc. (CAT) for the first time, citing concerns that the construction equipment maker has become significantly overvalued following an AI-driven rally that nearly doubled its stock price in early 2026. Burry entered the trade at a share price of $1,060.98, alongside new bearish positions in Nvidia, Applied Materials, Tesla, and the iShares Semiconductor ETF (SOXX). He views Caterpillar as a primary beneficiary of the artificial intelligence investment boom that has pushed its valuation to record highs. In his analysis, Burry highlighted that Caterpillar's price-to-sales ratio has climbed to its highest level in at least three decades. He argues that the recent surge is driven by big spending announcements from Korea, which he believes marks the beginning of a correction for overextended AI-linked stocks. The article notes that Caterpillar shares capped the first half of 2026 with an 86% gain, making it one of the best-performing S&P 500 stocks this year. Burry also reiterated broader concerns regarding semiconductor valuations, noting the Philadelphia Semiconductor Index is trading at levels comparable to the dot-com bubble.