Michael Burry shorts Caterpillar, Tesla, Nvidia in 5-name AI basket

Michael Burry shorted Caterpillar Inc. for the first time alongside Tesla Inc. and Nvidia Corp., calling the AI and semiconductor rally overextended.

"The Philadelphia Semiconductor Index is trading more than 65% above its 200-day moving average, a stretch seen only once before — in 2000," Burry wrote in his paid "Cassandra Unchained" Substack post Tuesday. He added that the index's price-to-sales ratio sits above 16 times, a level that stripping out Nvidia "barely dents."

Burry disclosed the positions in a quarter-end sweep against stocks he considers overvalued. He shorted Caterpillar at $1,060.98, Nvidia at $198.09, the iShares Semiconductor ETF (SOXX) at $642.80, and Applied Materials Inc. at $729.40. Tesla came last in the list, shorted at $416.22 after the stock jumped roughly 10% in Tuesday's session. He did not disclose position sizes, share counts, or options structures for any of the five bets.

The disclosure marks Burry's most concentrated bearish wager since shutting down his hedge fund in late 2025. His broader thesis — that AI and semiconductor stocks have priced in perfection — carries weight with valuation metrics stretched to historic extremes, though his track record on Tesla specifically has been mixed. The SOXX puts were rolled from January 2027 to March 2027 with strikes moved to the low-to-mid $400s, while he maintained QQQ January puts.

Caterpillar enters Burry's crosshairs for the first time

The Caterpillar short is the most notable addition. The industrial bellwether, whose performance tracks global infrastructure investment, mining, and energy capital expenditure, has nearly doubled in the AI-driven rally of 2026. Burry's bearish stance may reflect a view that the industrial cycle is peaking as global economic growth slows, though his Substack post did not specify a thesis for the Caterpillar position specifically.

Tesla: a familiar target with an unfamiliar framing

Burry's Tesla short comes with important caveats. He shorted into a 10% rally rather than chasing a falling stock, writing: "Happy it jumped back to this level." The position size is unknown, and his history with Tesla shorts has been overstated before. A 2021 Scion Asset Management 13F filing showed put options tied to 800,100 Tesla shares, which much of the press reported as a $534 million bet — a figure that represented notional value, not capital at risk. He covered that position by November 2021.

Tesla trades around 295 times earnings on declining profits, with annual dilution of about 3.6% and a trillion-dollar pay package layered on top. Still, Burry himself has acknowledged that a sound valuation argument does not automatically make a good short.

The semiconductor thesis is the main event

The bulk of Tuesday's note focused on semiconductors, not individual stocks. Burry argued the SOX index's 65% deviation above its 200-day moving average and price-to-sales ratio above 16 times represent a historic extreme. He rolled his SOXX puts forward and raised strikes, signaling conviction that a drawdown is approaching.

"It is only a matter of time now," he wrote.

Burry's latest disclosures paint a picture of an investor betting against crowded AI trades while going long beaten-down names — he recently bought December 2028 LEAP call options on Microsoft Corp. at a $700 strike. The pair trade reflects a view that the AI trade has bifurcated: the infrastructure winners are overbought, while established franchises have been oversold. Investors will watch whether Burry's semiconductor thesis plays out as the sector enters second-half earnings season.

This article is for informational purposes only and does not constitute investment advice.