“Big Short” investor Michael Burry has placed a bearish bet on Caterpillar Inc. (NYSE:CAT), the heavy-machinery giant, which continues to benefit from the AI infrastructure buildout. However, some on Wall Street believe the bearish wager is misplaced.
Sergey Glinyanov, a senior analyst at Freedom Broker, told Fortune on Thursday that Caterpillar’s rally reflects a fundamental shift in infrastructure spending rather than AI hype, with growing investment in on-site power systems for AI data centers.
"A structural theme is emerging," Glinyanov said. He added that growing demand for on-site power systems is benefiting Caterpillar as AI data centers seek reliable alternatives to aging electrical grids. As larger AI campuses increasingly adopt diesel and natural gas generators, Caterpillar is well positioned to capture a greater share of this expanding market.
Glinyanov said the company’s core heavy equipment sales and rental business remains strong, supported by improving dealer inventories and steady demand, while its expanding exposure to AI power infrastructure has helped justify the stock’s premium valuation.
Michael Burry is betting against Caterpillar even as investors have driven the stock up 142% over the past year, anticipating it will be a major AI infrastructure beneficiary. The rally has also pushed its price-to-sales ratio to a 30-year high, according to the analyst.
