Michael Burry shorts Caterpillar after 86% rally on AI infrastructure bet

What happened

Investor Michael Burry said Tuesday he has shorted Caterpillar shares at $1,060.98, calling the construction-equipment maker one of the market's most overvalued beneficiaries of the AI investment boom. Caterpillar gained 86% in the first half of 2026, making it one of the best-performing stocks in the S&P 500 this year as investors embraced it as a proxy for the global AI infrastructure buildout.

Why it matters

Burry, who famously predicted the 2008 subprime crisis, flagged that Caterpillar's price-to-sales ratio has climbed to its highest level in at least three decades. He argues the broader semiconductor rally—with the Philadelphia Semiconductor Index trading about 65% above its 200-day moving average—mirrors valuation extremes last seen during the dot-com bubble in 2000, suggesting he believes the AI-driven market run is unsustainable.

What to watch

Burry cited "big spending announced out of Korea" as the proximate cause of today's rally, but stated "I see that as the beginning of the end." He also placed new bearish positions in Nvidia, Applied Materials, Tesla, and the iShares Semiconductor ETF (SOXX).