Michael Burry, known for his accurate prediction of the 2008 housing market crash, has initiated a short position against Caterpillar. This marks the first instance in which he has bet against the well-known machinery manufacturer. Burry is targeting Caterpillar amidst his broader strategy to capitalize on what he perceives as an inflated market driven by the artificial intelligence sector.
Burry expressed that Caterpillar stood out as a significant target in his investment strategy. Following a striking increase in Caterpillar's stock price, which soared nearly 100 percent during the rising AI trend and peaked at around $1,061 per share, he made the decision to short the stock.
#What does Burry's strategy against AI look like?
It is essential to note that Caterpillar is not acting alone in this strategy against AI. By June 30, 2026, Burry had also boosted his short positions in other major tech companies. This included substantial short positions on NVIDIA, Tesla, and Applied Materials. In the third quarter of 2025, his firm, Scion, held put options on five million shares of Palantir, translating to an exposure of approximately $912 million, alongside one million shares of NVIDIA at around $187 million. These two contrasting bets alone exhibit Burry's broad skepticism towards the AI sector.
Burry has specifically criticized major players like Oracle, Google, and Microsoft for their extensive investments in data centers, warning that the financial implications of their significant capital allocations are often overlooked in the current environment that heavily favors AI.
#Why target Caterpillar, particularly?
Considering that Caterpillar constructs heavy machinery used in construction, mining, and energy sectors, it appears distant from the AI sector. However, the frenetic pace of data center construction, fueled by the race to deploy AI infrastructure, has resulted in heightened demand for the earth-moving equipment that Caterpillar manufactures. Consequently, the market has positively responded, resulted in a nearly twofold increase in its stock price.
Interestingly, as of June 30, 2026, the absence of a formal 13F filing regarding Burry's short position on Caterpillar leaves investors relying on verbal and social media hints rather than official regulatory documentation. The forthcoming 13F filing from Scion is expected to clarify the specifics of this position, shedding light on its scale and setup.