Michael Burry Bets Against Caterpillar, Citing Overvaluation Fueled by AI Rally

Last updated: July 1, 2026 8:13 am

1 month ago

1 Min Read

Michael Burry, famous for his prescient market calls, has taken a short position in Caterpillar (CAT), arguing the construction equipment maker is overvalued by the AI boom. The stock has seen an 86% surge in the first half of 2026, with its price-to-sales ratio reaching historic highs.

Burry’s bearish stance extends to other AI-related giants like Nvidia and Tesla, as well as semiconductor ETFs, reflecting his broader concerns about an unsustainable market rally nearing its end.

Michael Burry Bets Against Caterpillar, Citing Overvaluation Fueled by AI Rally

By Staff Writer

Published Tuesday

Michael Burry Bets Against Caterpillar, Citing Overvaluation Fueled by AI Rally — Michael Burry attends "The Big Short" New York screening. (Astrid Stawiarz | Getty Images)

Michael Burry, the legendary investor known for predicting the 2008 financial crisis, has revealed a significant bearish position against Caterpillar (CAT). Burry stated on Tuesday that he has shorted the construction equipment giant at $1,060.98, viewing it as a prime example of a company that has become overvalued due to the current artificial intelligence investment fervor.

In addition to Caterpillar, Burry has also established new short positions in major AI-linked stocks and ETFs, including Nvidia (NVDA), Applied Materials (AMAT), Tesla (TSLA), and the iShares Semiconductor ETF (SOXX). This broadens his bet against what he perceives as an increasingly frothy rally in AI-related equities.

"Caterpillar jumped out at me," Burry wrote in a recent SubStack post. "I have never shorted Caterpillar. It has always done great for me on the long side in the past."

Caterpillar's stock performance in the first half of 2026 has been remarkable, with an 86% gain, positioning it as one of the S&P 500's top performers. Investors have increasingly adopted the company as a proxy for the global build-out of AI infrastructure, driving its valuation to new heights.

Caterpillar Year-to-Date Performance:

Interactive chart showing Caterpillar's year-to-date performance.

Burry highlighted that Caterpillar's price-to-sales ratio has reached multi-decade highs, coinciding with the stock's record-breaking surge. This valuation level, he believes, signals an unsustainable market trend.

The investor also reiterated his broader concerns about the semiconductor sector. He pointed out that the Philadelphia Semiconductor Index (.SOX) is trading approximately 65% above its 200-day moving average, a level not seen since the dot-com bubble of 2000.

"The proximate cause of today's rally is big spending announced out of Korea. Well, I see that as the beginning of the end," Burry commented, suggesting that the current market exuberance is nearing its peak. "It is only a matter of time now."