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Michael Burry, the hedge fund manager immortalized in “The Big Short” for calling the 2008 subprime mortgage crisis, just placed his first-ever short bet against Caterpillar. The heavy-machinery company has become one of the most unexpected beneficiaries of the AI infrastructure boom, and Burry thinks the party is over.
Burry revealed the position on June 30 through his Substack newsletter “Cassandra Unchained,” disclosing that he shorted CAT at $1,060.98 per share. The stock had rallied roughly 86% year-to-date and more than 150% over the trailing 12 months, powered largely by surging demand for Caterpillar’s power-generation equipment used in AI data centers.
The market listened. CAT shares dropped as much as 6.65% on July 1, retreating from record highs above $1,000.
Burry’s broader AI bubble thesis
Burry also disclosed short positions in Nvidia at $198.09, Tesla at $416.22, Applied Materials, and the iShares Semiconductor ETF. He’s framing the entire trade as a coordinated “AI bubble short,” arguing that valuations across the sector have detached from economic reality.
For Caterpillar specifically, Burry pointed to the company’s price-to-sales ratio sitting at its highest level in at least 30 years. Burry noted that semiconductor stocks are trading at multiples reminiscent of the dot-com era in 2000.
Burry acknowledged being surprised at betting against Caterpillar, a company he’s historically been long on. He described the current valuation as “not anywhere near supported by the actual business.”
Why a tractor company became an AI play
Caterpillar’s transformation into an AI-adjacent stock is one of the stranger narratives in this market cycle. The company, best known for bulldozers and excavators, has seen its Power and Energy segment become a major growth driver as hyperscale data centers gobble up electricity at unprecedented rates. Caterpillar manufactures the diesel and natural gas generators that keep these facilities running, especially in locations where grid capacity can’t keep pace with demand.
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