Michael Burry has shorted homebuilders, banks, tech giants, and even the SpaceX option he ultimately walked away from, as discussed in my previous SpaceX coverage. Burry has been a longtime bull on heavy industrial stocks, and Caterpillar specifically has been a profitable and working stock for him on the long side multiple times over the years. Now, that no longer seems to be the case on the last day of June 2026.Caterpillar jumped out at me. I have never shorted Caterpillar.Burry continued to write in his Substack newsletter Cassandra Unchained. “Today I shorted Caterpillar. It has always done great for me on the long side in the past.”Burry disclosed he shorted CAT at $1,060.98. Caterpillar (CAT) closed June 30 at $1,064.90, up 3.07% on the session, according to Yahoo Finance. As of this writing, the stock is up 76.68% year-to-date and 159.28% over the past year. That is after 5% drop in the afternoon of July 1, 2026, to trade at 1,003.34. When Burry makes a first-ever short in a name he has historically loved on the long side, it is worth slowing down to understand what he is seeing.Also Read: History of Caterpillar: Company timeline & factsThe broader short basket and what Burry is really sayingThe Caterpillar disclosure did not arrive in isolation. Burry also revealed short positions in Nvidia (NVDA) at $198.09, Applied Materials (AMAT) at $729.40, Tesla (TSLA) at $416.22, and the SOXX semiconductor index at $642.80, according to his Substack post.The common thread across these positions is valuation in the context of an AI-driven market cycle he views as overextended. “Not all of these are part of the Bank of America raises Caterpillar stock price target,” Burry wrote. “The SOXX itself is a pure form of overvaluation in an index, a form that is rarely seen and never so easily recognized as such.”His commentary on the market is equally blunt. “The proximate cause of today’s rally is big spending announced out of Korea. Well, I see that as the beginning of the end. It is only a matter of time now.”Related: Michael Burry pulls back on massive Palantir short betMy read of that framing is that Burry is not just making a call on individual stock valuations. He is making a macro call that the current AI infrastructure spending surge and the valuations it has generated across semiconductors and industrials alike are closer to a top than the market believes.My colleague Tobi covered his SpaceX trade in June. Burry studied the short there, ultimately walked away citing expensive options pricing, and wrote that he was “neither short nor, ahem, long.” On Caterpillar, he pulled the trigger.Why Caterpillar’s valuation is the specific concernThe numbers Burry is looking at are not difficult to find. CAT trades at a trailing price-to-earnings ratio of 53.03 and a forward P/E of 44.05, according to Yahoo Finance data as of June 30. These are not multiples historically associated with a cyclical industrial company in the middle of a normal equipment cycle.More Caterpillar:Caterpillar buys little-known AI startup in surprise tech moveCathie Wood buys another $72 million of mega-cap tech stockBofA sees more power behind Caterpillar sharesFor context, Caterpillar’s core business is the sale of construction and mining equipment. Its customers respond to commodity cycles, infrastructure spending, and global economic conditions. Paying 53 times trailing earnings for that exposure requires a very specific forward scenario to hold up.What has driven CAT’s 159% one-year return is partly genuine business strength and partly a valuation re-rating tied to infrastructure spending optimism, AI data center construction demand, and the company’s addition to the Russell Top 50 index. Now, Burry appears to be betting that multiple compressions are overdue.
Burry disclosed he shorted CAT at $1,060.98.Bloomberg via Getty Images
Caterpillar’s Q1 results show a business that is actually performing wellHere is where Burry’s short gets interesting because the fundamental story of Caterpillar heading into his trade is genuinely strong.First-quarter 2026 results, reported April 30, according to Caterpillar’s earnings release: Sales and revenues of $17.4 billion, up 22% year over yearAdjusted EPS of $5.54Operating cash flow of $1.9 billionA record backlog providing forward visibility. Deployed $5.7 billion in share repurchases and dividends in a single quarter. CEO Joe Creed described “robust order activity” and “solid sales and revenues growth.””A record backlog provides a strong foundation for continued positive momentum,” Creed said in the earnings release.This is the tension in Burry’s trade. The business is not broken. The concern is that the market is paying 53 times earnings for a business whose intrinsic earnings power, in a normalized cycle, does not justify that multiple.Looking at my chart, I see a supporting technical observation. CAT’s 50-day moving average (MA) sits near $992, and the 100-day near $946, both well below current prices. 200 MA sits at $908
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The $930 to $940 support zone, tested twice as resistance earlier in May and early June 2026, now becomes the first meaningful corrective retest level to the mid-June breakout, if selling pressure continues to build. A pullback toward that zone would not threaten the longer-term trend but would represent meaningful downside from where Burry entered his position.Related: Michael Burry pulls back on massive Palantir short bet