Prominent investor Michael Burry, the inspiration for the character in “The Big Short,” publicly stated this Tuesday that he has established a short position in construction machinery giant Caterpillar (CAT). In a post on his personal SubStack platform, he said that Caterpillar has become one of the most highly valued beneficiaries in the current artificial intelligence investment frenzy, a phenomenon that has drawn his serious attention. Burry acknowledged that he has never shorted this stock before, and that his past long positions in Caterpillar have consistently generated substantial returns.
Chart data shared by Burry in his post shows that Caterpillar’s share price rose a cumulative 86% in the first half of 2026, reaching an all-time high and becoming one of the strongest-performing components in the S&P 500 index. At the same time, the company’s price-to-sales ratio has climbed to its highest level in at least three decades. Burry stressed that this valuation indicator has entered a zone that he finds highly alarming.
Investors regard Caterpillar as a key bellwether for the global build-out of AI infrastructure, and this perception is the primary driver behind the stock’s sharp ascent. Goldman Sachs Research estimates that global AI-related capital expenditure could reach $1.6 trillion by 2031, with traditional industrial firms like Caterpillar continuing to gain from data center construction and infrastructure expansion.
Caterpillar’s first-quarter earnings report released in late April showed that revenue for the period grew 22% year over year to $17.42 billion, exceeding the market consensus of $16.61 billion. Both of the company’s core business segments—construction equipment and power and energy—delivered robust growth, with demand for energy equipment that supplies power to AI data centers standing out as a key highlight. Revenue from the power and energy segment rose 22% year over year, and the generators, engines, and gas turbines produced by this unit are widely used in industrial facilities and large-scale computing centers. As AI infrastructure construction accelerates, the surging electricity demand from data centers has kept Caterpillar’s energy equipment in persistent shortage, fueling a volume-driven expansion of the business.
In addition to Caterpillar, Burry also built new short positions this time in Nvidia (NVDA), Applied Materials (AMAT), Tesla (TSLA), and the iShares Semiconductor ETF (SOXX), preparing for what he believes is an overextended rally in AI-related stocks. The investor, who gained fame for accurately foreseeing the 2008 subprime mortgage crisis, reiterated his concerns about the overall valuation of the semiconductor sector, pointing out that the Philadelphia Semiconductor Index currently stands roughly 65% above its 200-day moving average—an extreme level previously seen only during the dot-com bubble of 2000.
