Michael Burry has shorted Caterpillar after its stock surged 172% in a year, arguing it is overvalued and part of an AI bubble. However, analyst Sergey Glinyanov argues the stock's rise reflects a genuine structural shift: AI data centers are buying Caterpillar's power-generation systems because the aging electrical grid cannot meet their energy demands. The outcome depends on whether hyperscalers maintain their aggressive spending on new data center infrastructure.
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Michael Burry, the investor famous for predicting the 2008 financial crisis, disclosed a short position in Caterpillar at $1,060.98 per share on Tuesday. Caterpillar shares fell nearly 7% by Wednesday and as much as 4% by Thursday, hitting their lowest point since mid-June at around $949 per share. Burry said the stock is overvalued after surging more than 100% over the past year and reaching its highest price-to-sales ratio in three decades.
Why it matters
Burry believes the AI infrastructure boom has inflated Caterpillar's valuation, viewing it as part of a broader AI market bubble (he has compared the market to the 1999–2000 bubble). However, analyst Sergey Glinyanov argues Burry is missing the real driver: Caterpillar is benefiting from a structural shift in spending on power infrastructure. AI data centers are increasingly buying Caterpillar's diesel and natural-gas generator systems as alternatives to an aging electrical grid that cannot keep up with soaring energy demands. Glinyanov points to the company's strong Q1 results—sales jumped 22% year-over-year to $17.4 billion（約2.8兆円）—as evidence the strength is fundamental, not hype.
What to watch
Glinyanov's firm has set a price target of $910 for Caterpillar, indicating a "potential near-term pullback." The key risk is whether large cloud providers (hyperscalers) continue to spend aggressively on data centers; if they slow their investments or face deteriorating cash flow or rising debt burdens, the optimism around Caterpillar could fade quickly.
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