Michael Burry's Bearish Bets on Tesla, Caterpillar, and Semiconductor Stocks See Significant Payoff Amidst July Market Pullback

Michael Burry’s Bearish Bets on Tesla, Caterpillar, and Semiconductor Stocks See Significant Payoff Amidst July Market Pullback

Last updated: July 25, 2026 7:19 am

Market VOWS

1 week ago

1 Min Read

Famed investor Michael Burry, known from “The Big Short,” has seen many of his recent short positions prove profitable following a July market sell-off. His bearish wagers against high-flyers like Tesla and Caterpillar yielded significant returns, with Tesla shares plummeting 24% and Caterpillar falling 16% since he initiated his shorts. While his semiconductor bets showed mixed results, four out of five publicly disclosed trades moved in his favor, prompting him to increase several positions as he remains committed to his bearish outlook.

READ MORE FROM CNBC

Famed investor Michael Burry, whose uncanny foresight into the U.S. housing market collapse was immortalized in 'The Big Short,' has witnessed a substantial payoff from his recent bearish wagers. A sharp market downturn in July, particularly affecting several high-growth stocks he targeted, has largely validated his latest investment strategy.

Burry publicly disclosed his short positions—bets on declining stock prices—in a June 30 Substack post. His targets included market heavyweights such as Caterpillar, Nvidia, the VanEck Semiconductor ETF, Applied Materials, and Tesla, all chosen after experiencing robust rallies. Short positions involve borrowing a stock, selling it for cash, and later repurchasing it at a lower price to repay the loan, profiting from the price difference.

Tesla proved to be Burry's most profitable short bet to date. Shares of the electric vehicle manufacturer plummeted by 15% on Thursday following an announcement of disappointing quarterly earnings late Wednesday. This extended its overall July decline to approximately 24%, bringing the stock's value down to $319.69. Burry had initiated his short position on Tesla at $416.22.

Caterpillar, the prominent construction equipment maker, also moved considerably in Burry's favor. Its stock value dropped about 16% during July, falling to $894.54 from the $1,060.98 level where Burry stated he opened his short. Interestingly, Burry commented in his June post, "I have never shorted Caterpillar. It has always done great for me on the long side in the past."

His bearish calls on the semiconductor sector have yielded mixed outcomes so far. The VanEck Semiconductor ETF decreased to around $551 from Burry's disclosed short entry of $642.80, and Applied Materials saw a reduction to approximately $562.80 from $729.40. However, Nvidia bucked the trend, rising to about $208.76 from Burry's short initiation price of $198.09.

Overall, four of Burry's five publicly revealed trades have proven favorable. This market correction aligns with a broader pullback across high-flying industrial and technology shares, which had enjoyed a powerful first-half rally largely fueled by enthusiasm for artificial intelligence and its associated infrastructure spending.

Burry indicated on Friday that he maintains his bearish conviction and has even augmented several of his positions. He confirmed that he has not closed his Tesla short, noting that "it gets smaller all on its own." Furthermore, he disclosed increasing his Caterpillar short at $893.49 and his Nvidia short at $210.28. Regarding Nvidia, he elaborated, "I continue to hold puts in good size." He provided further rationale, stating, "I believe much of current and future demand is not driven by end customers, end demand. Much and possibly most is financed, off-balance sheet and not lit. Future revenues are majority financed in a circular arrangement, per the 2026 BIS annual repot." The investor also confirmed adding to his VanEck Semiconductor ETF short at $535.83, initiating a new short in Micron Technology at $933.86, and maintaining a significant position in Nvidia put options.