The Big Short's Burry's New Thesis: First Short Caterpillar $CAT, Further Shorting AI and Semiconductors
- Core Thesis: Michael Burry, the fund manager famed for shorting subprime mortgages, disclosed several new short positions concentrated on AI infrastructure core stocks on June 30, 2026. These include Caterpillar, Nvidia, and a semiconductor ETF. His core logic is that the valuations of these targets have reached extreme highs, and a correction is only a matter of time.
- Key Elements:
- First-time short on Caterpillar ($CAT) at an entry price of $1,060.98. As an "AI infrastructure proxy stock," it surged 86% in the first half of the year, reaching its highest price-to-sales ratio in 30 years and a P/E ratio of approximately 53 times.
- On the same day, established new short positions in Nvidia (entry price $198.09), Applied Materials ($729.40), and the Philadelphia Semiconductor ETF (SOXX, $642.80).
- The core argument is that the Philadelphia Semiconductor Index (SOX) is trading over 65% above its 200-day moving average, with a price-to-sales ratio exceeding 16 times. This level of stretch has only been seen during the dot-com bubble.
- Shorted Tesla at $416.22, though the scale was not disclosed. Burry has previously criticized its "absurdly overvalued" valuation and equity dilution issues.
- This "end-of-quarter clearance-style shorting" is a continuation of his consistently bearish stance. He had previously taken large short positions on Palantir and Nvidia, warning that the financial risks of AI expansion resemble the 1999-2000 bubble.
Original Author: Claude, TechFlow
TechFlow Insight: Michael Burry, the inspiration for "The Big Short," has disclosed his latest short portfolio, including his first-ever short position on Caterpillar ($CAT), the best-performing S&P 500 stock this year (up 86% in the first half), with an entry price of $1,060.98. On the same day, he also initiated new short positions in Nvidia, Applied Materials, Tesla, and the Philadelphia Semiconductor ETF (SOXX). These targets are almost all core beneficiaries of the AI infrastructure trade. Burry's assessment: Valuations have reached extremes he hasn't seen in 30 years, and "it's only a matter of time."
On June 30, hedge fund manager Michael Burry, renowned for accurately betting against the 2008 subprime mortgage crisis, published a post on his paid Substack column "Cassandra Unchained" disclosing a batch of new short positions targeting the AI and semiconductor sectors. The article, titled "Trading Post June 30, 2026," boils down to a single core thesis: This AI rally has climbed to dangerous levels.
According to CNBC, Burry wrote: "This is my first time shorting Caterpillar. In the past, going long on this stock has always treated me well." This highlights the most unusual aspect of this portfolio: Caterpillar is not an AI company; it manufactures construction, mining, and energy equipment.
First-Ever Short on Caterpillar at $1,060.98: It's Become an 'AI Infrastructure Proxy'
Burry shorted Caterpillar at $1,060.98. What alarmed him was the valuation: with the stock price hitting all-time highs, Caterpillar's price-to-sales (P/S) ratio has risen to levels not seen in at least the past 30 years. According to GuruFocus data, its price-to-earnings (P/E) ratio is around 53 times.
Caterpillar itself is unrelated to AI, but the market has treated it as a "pick-and-shovel play" for global AI infrastructure investments. Data center construction requires power generation, transmission, and civil engineering, funneling more and more capital into this heavy equipment giant. As a result, Caterpillar surged 86% in the first half of 2026, becoming one of the best-performing components of the S&P 500 this year.
Burry offered his interpretation of the immediate trigger for the day's rally. According to TipRanks, he wrote: "The direct trigger for today's rally was the massive spending plan announced by South Korea. In my view, this is precisely the beginning of the end. It is now only a matter of time."
Shorting Nvidia, Applied Materials, and SOXX in a Single Day, All with Entry Prices
Caterpillar is not an isolated case. According to reports from Electrek and Investing.com, Burry disclosed the short entry prices for positions initiated on the same day (June 30) as follows: Nvidia at $198.09, the Philadelphia Semiconductor ETF (SOXX) at $642.80, and Applied Materials at $729.40.
The main focus of this column, however, is not Caterpillar but semiconductors. Burry's argument centers on extreme valuations: the Philadelphia Semiconductor Index (SOX) is currently trading more than 65% above its 200-day moving average. This level of extension has only been seen once in history – at the peak of the dot-com bubble in 2000. He also points out that the index's P/S ratio exceeds 16 times, a figure that remains "almost unchanged" even when excluding Nvidia.
In terms of specific operations, he rolled his put options on SOXX from January 2027 to March 2027, with the strike price adjusted to just over $400. He continues to hold January puts on the Nasdaq ETF (QQQ). Regarding a potential semiconductor pullback, he writes: "It's only a matter of time."
Shorting Tesla at $416.22, but Position Size Not Disclosed
Burry's approach to Tesla differs from his previous trades. According to Yahoo Finance, he wrote: "Finally, I shorted Tesla at $416.22. Glad it rallied back to these levels." Tesla closed at $379.71 the previous trading session and surged roughly 10% intraday on Tuesday, meaning Burry initiated the short during an uptrend, not by chasing a decline.
Notably, he did not disclose any sizing information for the Tesla short – no share count, no dollar amount, and no indication of whether options were used. This point requires careful interpretation. Burry's past Tesla shorts have often been exaggerated by the media: In Q1 2021, Scion's 13F filing showed puts corresponding to 800,100 Tesla shares, widely reported as a "$534 million" short position. However, this was merely the notional value (share market value calculated at the closing price), not his actual capital outlay (the option premium, which is significantly smaller). He had already closed that position by November 2021.
Tesla still fits Burry's overall bearish thesis. Last December, he criticized Tesla's "absurd" share dilution and "absurdly overvalued" valuation, linking it to the shareholder-approved trillion-dollar compensation plan for Elon Musk. In April, after analyzing audit reports of several tech companies over the past decade, he labeled Tesla the "King of the Tragedy Layer" – a reference to companies where stock-based compensation simultaneously exceeds both GAAP incentive costs and cumulative net profits.
A Quarter-End 'Liquidation-Style Short,' but Without 13F Backing
According to Investing.com, this batch of positions reads more like a quarter-end sweep targeting "overextended" assets rather than a judgment on any single stock. Burry has already turned decisively bearish: In Q3 2025, Scion held puts on 5 million shares of Palantir (notional value ~$912 million) and 1 million shares of Nvidia (notional value ~$187 million), with these two positions alone totaling roughly $1.1 billion in notional exposure. He has repeatedly called out Oracle, Google, and Microsoft for their aggressive data center expansion, warning the market is overlooking the financial risks of heavy capital consumption amid AI optimism, and frequently draws parallels between the current rally and the 1999-2000 dot-com bubble.
Readers should note: As of the time of writing, there are no confirmed 13F filings disclosing the Caterpillar short. All current information comes from Burry's personal column and social media, not regulatory filings. The exact size and structure of the positions will require hard data from Scion's next 13F filing.
