Michael Burry Shorts Caterpillar, Citing Overvaluation Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 30 2026
0mins
Source: seekingalpha
Caterpillar Inc's stock fell by 5.02% as it crossed below the 5-day SMA, reflecting investor concerns amid broader market declines.
Renowned investor Michael Burry shorted Caterpillar shares at $1,060.98, believing the construction equipment maker has become one of the most overvalued beneficiaries of the AI investment boom. He highlighted that Caterpillar's price-to-sales ratio has reached its highest level in at least three decades, raising concerns about the company's future performance and suggesting potential market correction risks.
Burry's bearish stance comes after Caterpillar's stock surged 86% in the first half of 2026, making it one of the best performers in the S&P 500. His warning about overvaluation could lead to increased caution among investors, particularly as the market faces potential corrections.
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Analyst Views on CAT
Wall Street analysts forecast CAT stock price to fall
15 Analyst Rating
8 Buy
6 Hold
1 Sell
Moderate Buy
Current: 969.920
Low
395.00
Averages
620.54
High
730.00
Current: 969.920
Low
395.00
Averages
620.54
High
730.00
About CAT
Caterpillar Inc. is a manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Its segments include Construction Industries, Resource Industries and Power & Energy. It also provides financing and related services through its Financial Products segment. Construction Industries segment is responsible for supporting customers using machinery in infrastructure and building construction applications. Resource Industries segment develops and manufactures high productivity equipment for both surface and underground mining operations around the world, and provides select work tools, machinery components, wear and maintenance components and related parts. Power & Energy segment supports customers in oil and gas, power generation, marine, rail and industrial applications, including Caterpillar machines. It is engaged in the provision and development of mining software solutions to the mining industry.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Price Increase Impact: The company announced price hikes for its Mac and iPad products, with CEO Tim Cook describing the memory and storage shortage as a 'hundred-year flood,' which could significantly impact iPhone pricing and increase consumer purchasing pressure.
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- Micron's Impressive Earnings: Micron's fiscal Q3 revenue surged over fourfold year-over-year to $41.5 billion; however, Burry argues that its stock price remains above historical averages, suggesting that market optimism about its future profitability may be overly optimistic.
- Tesla Delivery Figures: Tesla delivered 480,126 vehicles in Q2, a 25% year-over-year increase, yet its stock trades at over 350 times earnings, indicating high market expectations for future profitability, which Burry questions.
- Nvidia's Strong Growth: Nvidia's fiscal Q1 revenue rose 85% year-over-year to $81.6 billion, yet its stock trades at a 30 times earnings multiple, leading Burry to suggest that such valuations may not be sustainable, especially if the market's enthusiasm for AI proves to be a bubble.
See More
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- Micron Technology Risks: Burry highlighted that Micron's stock trades significantly above its 200-day moving average, with its fiscal Q3 revenue soaring over 400% year-over-year to $41.5 billion; however, he believes such high earnings levels are unsustainable and may face downside risks.
- Nvidia Valuation Defense: Despite Nvidia's fiscal Q1 revenue rising 85% year-over-year to $81.6 billion, with data center revenue climbing 92%, its stock trades at about 30 times earnings, leading Burry to question whether this high valuation can be maintained amid potential AI bubble concerns.
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