Michael Burry just shorted Caterpillar’s 172% AI rally. One analyst says his bet won’t even matter

Investor Michael Burry of “The Big Short” fame has a new short target in his sights: Caterpillar, the heavy-machinery giant that has surged thanks to the AI infrastructure boom. Burry, the former hedge fund manager who famously predicted the 2008 subprime mortgage crisis and earned hundreds of millions of dollars for his investors in the process, said Caterpillar’s stock is now overvalued after a run-up that has seen its stock soar by more than 100% over the past year. “Caterpillar jumped out at me,” Burry wrote in a Substack post this week. “I have never shorted Caterpillar. It has always done great for me on the long side in the past.” Times have changed. The investor said he shorted Caterpillar at $1,060.98 per share Tuesday. By Wednesday, Caterpillar shares had closed down nearly 7%. As of Thursday, shares fell by as much as 4%, hitting their lowest point since the middle of June at about $949 per share. Yet, not everyone agrees with Burry’s call. Sergey Glinyanov, a senior analyst at Freedom Broker who covers Caterpillar, told Fortune in an email that Burry’s short position isn’t likely to affect the stock at all. What the famed investor is missing is that Caterpillar’s share price isn’t surging because of AI hype, he said. Glinyanov told Fortune that, in fact, investors are rewarding the company because it is benefiting from a fundamental shift in infrastructure spending. “A structural theme is emerging,” Glinyanov told Fortune, pointing to a growing demand for on-site power systems, as AI data centers look for alternatives to an aging electrical grid that cannot always keep up with soaring energy needs. As developers build bigger and bigger AI campuses, they are increasingly seeking out the diesel and natural‑gas generator power systems that Caterpillar sells to secure reliable power. The company’s positioning in this area sets it up to capture a larger share of that spending, Glinyanov argues. As AI has propell