Controversial investor Michael Burry says he’s looking at one pick-and-shovel trade in the AI boom that could be a candidate for a short position.
In a new post on X, the Big Short investor includes the construction equipment manufacturer Caterpillar (CAT) in his analysis on how tech firms are using financial engineering and leverage to fund the $2 trillion AI buildout.
While CAT is not a tech firm, Burry says the firm is in the middle of the data center boom.
“CAT has seen a cycle or two, and is in the game with the buildout. CAT may have a rational opinion as to when it ends.”
Caterpillar is riding the AI buildout, leveraging its heavy machinery and power systems to support large-scale data center builds while providing reliable on-site power generation. Investors have been flocking to the stock since April 2025, pushing CAT from a low of $267.30 to $759.74 as of last week’s close – a nearly 200% ascent in less than a year.
Although CAT is a big beneficiary of the hundreds of billions of dollars in AI CapEx, Burry appears to be saying Caterpillar is a late-cycle play that could be one of the first to fall if the spending wave crescendos.
He says shorting CAT is a play that he has considered.
Burry is one of the biggest bears of the AI boom, placing over $1 billion bearish bets on Palantir (PLTR) and Nvidia (NVDA). In January, the famed short seller said he had accumulated positions in the popular memestock GameStop (GME).
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