Michael Barry attends the New York screening of ‘The Big Short’ at the Ziegfeld Theater on November 23, 2015 in New York City.
Astrid Stawiarz | Getty Images
Michael Barry said Tuesday that he placed a bearish bet on Caterpillar as the construction equipment maker benefited from the artificial intelligence investment boom to become one of the most overvalued companies in the market.
The well-known investor said he shorted Caterpillar stock at $1,060.98, along with new bearish positions in Nvidia, Applied Materials, Tesla, and the iShares Semiconductor ETF (SOXX) in preparation for what appears to be a growing rally in AI stocks.
“A caterpillar jumped out at me,” Barry wrote in a Substack post on Tuesday. “I’ve never shorted Caterpillar. It’s always given me great results on the long side.”
Caterpillar shares just finished the first half of 2026 up 86%, making the construction equipment giant one of the S&P 500’s best-performing stocks this year as investors increasingly embrace Caterpillar as a proxy for global AI infrastructure.
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Caterpillar from this year to the present
Berry said Caterpillar’s stock valuation has reached a level that interests him. He shared a graph showing Caterpillar’s stock price soaring to an all-time high at the same time that the company’s price-to-sales ratio rose to its highest level in at least 30 years.
The investor, who famously predicted and profited from the 2008 subprime mortgage crisis, also reiterated broader concerns about semiconductor valuations. He said the Philadelphia Semiconductor Index is trading about 65% above its 200-day moving average, a level only reached during the dot-com bubble in 2000.
“The immediate cause of today’s rise is the huge spending announced by South Korea. Well, I see that as the beginning of the end,” Barry said. “It’s only a matter of time.”
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