Shares of Caterpillar ($CAT) have fallen approximately 22% since Michael Burry disclosed a short position on June 30, making it one of the most profitable publicly known trades in his latest bearish portfolio. Burry opened the position after arguing that Caterpillar had become one of the biggest beneficiaries of the AI infrastructure boom and was trading at historically elevated valuation multiples.
The decline follows an exceptional first-half rally that saw Caterpillar emerge as an indirect AI play, driven by surging demand for power generation equipment used in data centers. Burry simultaneously disclosed bearish positions in Nvidia, Tesla, Applied Materials, and the SOXX semiconductor ETF, describing the AI-driven market rally as increasingly overextended.
The move reinforces Burry’s broader thesis that AI-related stocks have detached from fundamentals after a historic run. While Caterpillar continues to benefit from strong long-term demand tied to AI infrastructure, the recent pullback suggests investors have begun reassessing valuation after one of the strongest rallies in the industrial sector.
