Renowned hedge fund manager Michael Burry, the real-life figure behind 'The Big Short', has unveiled a new series of bearish positions.
He revealed that he has established short positions targeting the artificial intelligence and semiconductor sectors, with a list that includes NVIDIA (NVDA), Applied Materials (AMAT), Tesla Motors (TSLA), Caterpillar (CAT), and the iShares Semiconductor ETF.
Michael Burry stated that the Philadelphia Semiconductor Index is currently trading approximately 65% above its 200-day moving average, a level only previously seen during the 2000 dot-com bubble, and that Caterpillar's current valuation is excessively high.
He has previously issued multiple warnings about an AI-driven bubble in tech stock valuations. He did not disclose the specific size of these short positions, only noting that he entered the Tesla trade following its recent rebound.
Market reactions were mixed, with the mentioned stocks showing slight declines in pre-market trading at the time of reporting.
Initial Short Position on a Key AI Infrastructure Player
In a Substack article published on June 30th, Michael Burry reiterated his bearish stance on the AI and semiconductor sectors.
For the first time, industrial machinery giant Caterpillar, a stock he had frequently taken long positions in before, appeared on his short list.
Caterpillar is viewed by investors as a representative play on global AI infrastructure. The significant expansion of AI data centers has notably boosted demand for its power generation equipment, making the company a popular investment within the AI thematic space.
Caterpillar explicitly states its aim to "build an AI-powered future" and has partnered with NVIDIA (NVDA) to transform how equipment, job sites, factories, and supply chains operate.
The stock concluded the first half of 2026 with an 86.68% cumulative gain, during which its price repeatedly hit new highs. This performance made it one of the best-performing stocks in the S&P 500 index, with its total market capitalization firmly within the top 30 constituents. Additionally, Caterpillar has contributed significantly to the Dow Jones Industrial Average's rebound since its late-March low.
Michael Burry posted that he shorted Caterpillar at a price of $1,060.98, stating the stock's valuation has become too high.
"This is my first short on Caterpillar. I made good money being long in the past," he mentioned, adding that the current valuation has reached a level that alarms him.
Markets had previously believed Caterpillar stood to benefit directly from the AI infrastructure boom. Goldman Sachs once estimated that global AI-related capital expenditure could reach $1.6 trillion by 2031, with traditional industrial firms like Caterpillar continuing to benefit from data center construction and infrastructure expansion.
Reiterating Worries Over Semiconductor Valuations
Michael Burry also emphasized his concerns regarding the overall valuation of the semiconductor sector.
He stated he has established short positions in NVIDIA (NVDA), Applied Materials (AMAT), Tesla Motors (TSLA), and the iShares Semiconductor ETF. The short entry prices were $198.09 for NVIDIA (NVDA), $729.4 for Applied Materials (AMAT), $416.22 for Tesla Motors (TSLA), and $642.8 for the iShares Semiconductor ETF.
Michael Burry pointed out that the Philadelphia Semiconductor Index is currently trading more than 65% above its 200-day moving average, a similar situation that only occurred once before during the 2000 internet bubble.
He entered the short position on Tesla after its recent rebound, writing in his post, "Glad it bounced back to this level."
This is not the first time Michael Burry has been bearish on Tesla; he previously criticized the company for its "ridiculous high valuation."
Furthermore, he rolled over the put options on the iShares Semiconductor ETF from January 2027 to March 2027.
Michael Burry has issued multiple bearish warnings on artificial intelligence before. In May of this year, he posted, "The stock market's mania over AI is starting to look like the latter stages of the internet bubble."
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