Key Takeaways:
Michael Burry shorted Caterpillar at $1,060.98, adding the construction-equipment maker to a list of bearish wagers against stocks he says have been inflated by the artificial intelligence boom.
"The proximate cause of today's rally is big spending announced out of Korea. Well, I see that as the beginning of the end," Burry wrote Tuesday on his SubStack, referring to Samsung Electronics and SK Hynix's plan to invest more than $500 billion in a new chipmaking hub in South Korea.
Burry also disclosed new short positions in Tesla, Applied Materials and the iShares Semiconductor ETF (SOXX), alongside an existing bet against Nvidia. Caterpillar shares surged 86% in the first half of 2026 as investors embraced the company as a proxy for AI infrastructure buildout. Burry said the stock's price-to-sales ratio had climbed to the highest level in at least three decades. The SOXX is trading about 65% above its 200-day moving average, a level Burry said was reached only during the dot-com bubble.
The investor, who famously profited from betting against subprime mortgages before the 2008 financial crisis, has been an outspoken critic of AI-related stock valuations. His November 2025 short on Palantir has paid off, with shares down about 40% since he announced the position. Nvidia shares are trading about 5% lower. Burry set a price target of $416.22 for his Tesla short.
Samsung and SK Hynix, which together produce about two-thirds of the world's memory chips, said they will invest 800 trillion won ($518 billion) to build two fabrication plants each in South Korea's southwest region. The companies have reported record profits in recent months as AI demand for high-bandwidth memory chips surged. Burry's SOXX put options pay off in March if the semiconductor index drops about a third from its peak.
Burry said he had never shorted Caterpillar before and had always done well on the long side. "Caterpillar jumped out at me," he wrote.
The bets signal Burry expects the massive capital spending on AI infrastructure to eventually disappoint. His next catalyst will come in March, when the SOXX options expire and investors assess whether the Korean chip hub investment delivers returns.
This article is for informational purposes only and does not constitute investment advice.
