Michael Burry has opened a short position in Caterpillar, reversing his previous bullish stance and publicly flagging what he sees as extreme valuation and overexposure to the AI and infrastructure theme. The stock closed at $991.41, up 65.7% year to date and 14.6% over the past month, with a 405.0% five-year return. Burry's move comes as Caterpillar has been added to the Russell Top 50 Index and continues to be framed as an AI infrastructure beneficiary, with external commentary highlighting a P/E near 31 times 2026 earnings forecasts and enterprise-value-to-sales above 6 times, versus prior peak cycles in the 2 to 4 times range. The short thesis questions whether current AI data center power demand and record backlogs justify these multiples, especially as insiders have been selling and third-party models describe the stock as expensive. Key risks include tariff exposure, margin pressure, and higher interest rates, while potential rewards include strong first-quarter 2026 results, a record backlog, and increased institutional profile from index inclusion.
Caterpillar IncMichael Burry disclosed a short position, citing extreme valuation and overreliance on AI/infrastructure themes.