Caterpillar (CAT) is better known for its yellow bulldozers than for wild stock swings. Over the past two weeks, the stock has delivered one anyway.
Shares fell about 9% on Thursday, October 29, 2026, according to Stock Analysis data. That was the day Caterpillar reported its highest sales quarter ever, CEO Joe Creed said on the earnings call.
Shares then lost another 10% in the week ended Friday, November 6, 2026, as the same data shows.
One investor was ready for it. Michael Burry, made famous by “The Big Short,” has bet against Caterpillar since June. Now he has cashed in most of that bet.
“My Caterpillar puts have roughly quadrupled, and today I took them down 75%,” Burry wrote in a Friday, November 6, 2026, post on his Substack newsletter, Cassandra Unchained.
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Puts are options that rise in value when a stock falls. Burry added that what he kept is worth about what he put into the whole trade in late June. By that math, he has banked roughly three times his original stake and still has a bet riding.
Burry’s case started with Caterpillar’s price
Burry’s main argument was about price. He first went short in late June at $1,060.98 a share, according to CNBC.
He backed the call with a chart showing Caterpillar’s price-to-sales ratio at its highest level in at least three decades, the outlet reported. In plain terms, he argued investors were paying too much for the stock.
The business has kept its end of the deal. Caterpillar’s backlog hit a record $78 billion in the third quarter, nearly double a year earlier, Creed said on the call.
Data centers are doing much of that work. Creed said Power Generation sales to end users jumped 75%, led by turbines and large engines for data centers.
Yet the stock sank. On the same call, Caterpillar guided to moderate fourth-quarter sales growth, and Creed said there is “no slack in the system.” New capacity remains the top limit on growth in its Power & Energy business, he added.
Burry, though, is not ready to call the trade over.
Michael Burry cut his Caterpillar put position by 75% after the options roughly quadrupled, keeping a slice worth about what he first invested.picture alliance / Getty Images
Why Burry kept a slice of the bet
Selling most of a winning position is not the same as turning bullish. Burry moved most of his bearish exposure into puts on the Nasdaq 100 and the VanEck Semiconductor ETF (SMH) in October, he told Substack readers. He also still holds puts on Oracle and Palantir.
The size of each trim tells the story. On Thursday, November 5, 2026, a day before the Caterpillar sale, Burry wrote that he sold just 25% of his semiconductor ETF puts and called the rest very large positions.
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Cutting chips by a quarter and Caterpillar by three-quarters suggests he sees more downside left in chips. Caterpillar closed on Friday, November 6, 2026, about 48% below its 52-week high, according to Stock Analysis.
Burry is still bearish on Caterpillar. He is just doing it with money the market has already paid him.
What Wall Street thinks of Caterpillar stock
Caterpillar is worth about $255 billion, according to Stock Analysis. It sells into construction, mining and energy, so its orders offer a read on all three.
Analysts have not walked away, according to Stock Analysis:
The consensus rating is Buy, based on 29 analysts.
The average price target is about $823, roughly 47% above the November 6 close.
Shares trade at about 19 times expected earnings, after the selloff squeezed the valuation.
Still, the targets are coming down. Wells Fargo cut its target to $840 from $1,155 on Monday, October 26, 2026, while keeping its Buy rating, according to Stock Analysis. Even the bulls now value the same orders less.
Old industrial stocks now carry tech-style risk
Caterpillar’s slide shows what happens when an old-line machine maker gets priced like a growth stock. Once that happens, a record quarter is no longer enough.
That lesson reaches beyond one company. Investors who own industrial stocks for steadiness now hold a piece of the data center cycle, swings included.
The next test comes in January, when, as Creed said, Caterpillar will lay out its 2027 view. If new capacity reduces that backlog and leads to faster deliveries, Burry’s remaining puts could fade quietly. If data center customers slow their orders first, the small bet he kept could pay off all over again.
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