--- title: "Michael Burry Shorts Caterpillar, Betting the AI Boom Has Gone Too Far" description: "Michael Burry, the investor made famous by 'The Big Short,' says he has bet against Caterpillar after a 172% run-up in its shares driven by demand for data-center power equipment. He calls it part of an 'AI bubble'; one analyst counters that the rally reflects real, structural demand." category: "Companies" category_url: https://boursel.com/category/companies author: "Kenji Nakamura" published: 2026-07-02T21:45:00.000Z updated: 2026-07-02T21:45:00.000Z canonical: https://boursel.com/article/michael-burry-shorts-caterpillar-betting-the-ai-boom-has-gone-too-far tags: ["caterpillar", "michael-burry", "short-selling", "ai", "valuation"] --- # Michael Burry Shorts Caterpillar, Betting the AI Boom Has Gone Too Far Michael Burry, the investor made famous by 'The Big Short,' says he has bet against Caterpillar after a 172% run-up in its shares driven by demand for data-center power equipment. He calls it part of an 'AI bubble'; one analyst counters that the rally reflects real, structural demand. The man who bet against the U.S. housing market before 2008 has a new target: Caterpillar, the maker of bulldozers and, increasingly, the power equipment that keeps AI data centers running. ## The bet **Michael Burry** — the investor portrayed in *The Big Short* — disclosed on his Substack newsletter that he **shorted Caterpillar at $1,060.98 a share**, [Fortune reported](https://fortune.com/2026/07/02/michael-burry-short-caterpillar-ai-infrastructure-bubble-power-systems-valuation/). It fits a pattern: Burry says he is also betting against **Tesla, Nvidia and semiconductor funds**, framing the wager as a call that the market is in an **"AI bubble."** (To **short** a stock is to sell borrowed shares in hopes of buying them back cheaper later; the trade profits if the price falls and loses if it rises — with, in theory, unlimited downside.) What drew his eye is the size of Caterpillar's move. The shares have **surged about 172% over the past year** — and 77% in 2026 alone — pushing the stock's **price-to-sales ratio to its highest level in three decades**, per Fortune. For a 100-year-old industrial company, that is a striking re-rating, and it happened largely because of one story: AI. ## Why Caterpillar became an "AI stock" Caterpillar doesn't make chips, but it makes the **engines and generators** that power the data centers now being built at a furious pace to train and run artificial intelligence. Electricity is the binding constraint on AI: the aging power grid can't deliver enough of it fast enough, so hyperscale operators are increasingly installing their **own on-site power generation** — much of it Caterpillar equipment. That reframed a cyclical machinery maker as a play on the AI build-out, and investors bid the stock up accordingly. The company's most recent quarter was strong, with **sales up about 22% to $17.4 billion.** ## Two ways to read the same rally Burry's thesis is that the AI enthusiasm has detached Caterpillar's price from its fundamentals — that a good story has become an excuse to pay a historically extreme multiple, echoing the dot-com peak of 1999–2000. Not everyone agrees. **Sergey Glinyanov**, an analyst at Freedom Broker, argues Burry's short "isn't likely to affect the stock at all," because the rally rests on **a genuine structural shift** — lasting demand for on-site power systems as data centers seek alternatives to the strained electrical grid, [per Fortune](https://fortune.com/2026/07/02/michael-burry-short-caterpillar-ai-infrastructure-bubble-power-systems-valuation/). In that reading, the orders are real, long-lived and just beginning, and the premium is justified. The disagreement captures the central question hanging over the whole AI trade: is the spending a durable new source of demand, or a bubble inflating valuations that will eventually deflate? ## Why it matters For **investors**, a high-profile short from a contrarian known for one spectacularly right call is a reminder that the AI rally has minted skeptics as well as believers — and that even a profitable, real-economy company like Caterpillar can be swept up in the debate about whether AI valuations have run ahead of reality. For the **market**, Caterpillar is a useful test case precisely because it *isn't* a speculative startup: it has earnings, a backlog and a century of history, so the argument is purely about **price**, not viability. And for the **AI build-out**, the episode underlines how far the boom's ripple effects now reach — into engines, generators and the century-old industrials that supply them. Boursel gives no investment advice and takes no side on where Caterpillar's stock goes next; the takeaway is that one of the market's most famous bears has planted a flag against the AI rally — and reasonable analysts think he's wrong. Time, and Caterpillar's order book, will settle it. ## Sources - [Michael Burry shorted Caterpillar's AI rally. One analyst says his bet won't even matter](https://fortune.com/2026/07/02/michael-burry-short-caterpillar-ai-infrastructure-bubble-power-systems-valuation/)