Michael Burry opens first Caterpillar short, adds Nvidia and Tesla bets

Michael Burry shorted Caterpillar Inc. for the first time in his career, adding positions against Nvidia Corp., Tesla Inc., Applied Materials Inc. and the iShares PHLX Semiconductor Sector Index ETF (SOXX). He disclosed the trades on his Substack blog "Cassandra Unchained" on Tuesday.

"I have never shorted Caterpillar," Burry wrote. He did not provide position sizes or entry prices in the post. The disclosure marks a departure for the investor who built his reputation betting against subprime mortgages before the 2008 financial crisis.

Caterpillar is a bellwether for global construction and mining demand. A short on the stock signals an expectation that industrial activity will cool, though Burry offered no explicit thesis. The move comes as CAT stock page carries an Alpha Score of 64 out of 100 – a moderate risk-adjusted rating from AlphaScala's framework. The industrial sector has held up through the first half of the year, supported by infrastructure spending and energy-related equipment orders. A reversal in those drivers would hit Caterpillar's revenue stream directly.

Nvidia, the semiconductor leader, closed at $199.87 on Tuesday, up 2.51%. Burry's bet targets a stock that has more than doubled over the past year on AI demand. The NVDA stock page shows the stock near its highs, with a consensus that still sees further upside. Applied Materials, another semiconductor equipment maker, scored 73 on the Alpha Score – also in moderate territory. The AMAT stock page reflects recent positioning data.

Tesla and the SOXX ETF round out the new batch. Tesla has drawn short sellers before, correlating with its stretched valuation multiples. Burry's inclusion suggests a broader call that overvalued growth names and semiconductor-cycle stocks will correct together. The SOXX ETF holds Nvidia and Applied Materials, creating overlap between the two shorts. Betting against both the individual names and the sector fund is an unusual construction that may indicate a hedged or levered structure in his portfolio.

Burry's last widely tracked short was against Cathie Wood's ARK Innovation ETF in 2022. He closed that position after a sharp decline. The new batch covers industrials, technology, and semiconductors – sectors that tend to decline in a synchronized downturn. The stock market analysis page tracks broader market sentiment and sector rotation.

His Substack post did not explain the reasoning for any single pick. Followers of Burry's career note he rarely telegraphs his full strategy. The short on Caterpillar, a company he had never shorted before, stands out as the most unusual entry. The stock's dividend yield, its exposure to non-residential construction, and its role as a proxy for Chinese infrastructure demand all offer potential fault lines for a bear case. Burry has been vocal about risks from US fiscal policy and potential recession triggers. A slowdown in Chinese construction activity, which has already flagged this year, would amplify the pressure on Caterpillar's Asia revenue.

The Tesla short follows a pattern: Burry has targeted the stock before, calling it overvalued relative to traditional auto peers. Nvidia's short, by contrast, is riskier. The stock has momentum, and any earnings beat could force a sharp squeeze. Applied Materials faces a similar setup. The SOXX short is a hedge against the entire semiconductor cycle – a bet that the AI-driven capital expenditure boom has peaked or will slow.

Investors watching the industrial and semiconductor sectors now have a prominent bear on the record. The next earnings reports from Caterpillar and Nvidia, due later this quarter, will offer the first public test of Burry's conviction. If both companies deliver strong forward guidance, the short positions face immediate pressure. If guidance disappoints, the trades suddenly look prescient.