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CAT Hit a Record High. Burry Just Shorted It.

Caterpillar is up roughly 168% over the past 52 weeks and 86% in the first half of 2026 alone. The stock hit a new all-time intraday high of $1,073.46 on June 30. It is now one of the highest-priced stocks in the Dow and one of only a handful in the index with a price above $1,000.

Earnings are confirmed for August 4.

Here’s where it gets complicated.

The bull case looks almost too clean from the outside. Q1 2026 revenue came in at $17.4 billion, up 22% year-over-year. Adjusted EPS in Q1 2026 was $5.54, beating consensus by nearly a full dollar. The company reported a record order backlog of $63 billion, up 79% year-over-year. Power Generation sales jumped 48% in Q1, and management tied the strength in power generation demand directly to data centers on the earnings call. Management raised its 2026 outlook to low double-digit sales and revenue growth. They also lifted the quarterly dividend 8% to $1.63 per share and returned $5.7 billion to shareholders through buybacks and dividends in Q1 alone. Wells Fargo most recently raised its price target on the stock to $1,155.

And then Michael Burry disclosed he’s shorting CAT for the first time in his career. He entered the short at $1,060.98 on June 30, flagging that Caterpillar’s price-to-sales ratio has climbed to its highest level in at least 30 years. That’s worth sitting with for a moment.

The Valuation Problem

On almost every measure, Caterpillar is expensive right now. The stock trades at approximately 49x trailing earnings and roughly 39-41x forward earnings. The P/E ratio by some measures is closer to 53x, depending on the TTM earnings figure used. Peers like Cummins trade near 24x forward, which gives you a sense of the gap the market is pricing in.

That premium is defensible, but only under specific conditions. It holds if the Power and Energy backlog stays firm and keeps converting orders into high-margin services revenue. It compresses fast if margins disappoint or if hyperscaler spending on AI power infrastructure cools. That risk is real and already visible. Power and Energy margins faced pressure in Q1, partly from tariff costs, and Caterpillar has guided full-year 2026 tariff costs to between $2.2 billion and $2.4 billion. Q1 tariff costs came in at roughly $600 million, which was actually better than the $800 million estimate from January. But the full-year exposure is real.

The Street’s average price target sits near $951, which is roughly 10% below where the stock was trading at month-end. Individual banks are pushing higher. Baird has a target of $1,165. Evercore ISI is at $1,103. But the broad consensus math says the stock has already run through what most fundamental models support. That’s not a bearish call on the business. It’s a valuation call on the price.

What Drove the Run

It’s worth understanding why CAT moved like a tech stock in 2026. The AI data center buildout created an unexpected demand surge for industrial power infrastructure that nobody in the traditional Caterpillar analyst community fully modeled a year ago. When the AI economy framework started describing demand at every layer of the physical infrastructure stack, that included the diesel and natural gas reciprocating engines that power data center backup generation and off-grid compute facilities.

Caterpillar captures that directly through its Power and Energy segment. Management has discussed a major expansion of large reciprocating engine capacity over the next several years, with the large reciprocating engine backlog growing more than 3.5x since January 2024. Wells Fargo’s most recent checks across data center and oil and gas markets found that lead times for Caterpillar’s prime reciprocating engines and Solar Turbines now extend into 2029. That’s a genuine structural demand driver, not a cyclical bump.

Management has now set a target of more than 3x the 2024 baseline in Power Generation sales by 2030. The cost of the capacity ramp to get there hits the income statement before the revenue does. That’s part of why margins faced pressure even in a blowout quarter.

The EPS path is where the real question lives. Analysts are projecting roughly $23.99 in EPS for fiscal 2026 and higher into 2027. If those numbers materialize, the current forward multiple compresses to something more defensible. The question is whether tariff costs, margin pressure from capacity ramp expenses, and any softening in construction or mining demand leave that EPS path intact heading into August 4.

The Burry Factor

Burry disclosed the CAT short on June 30 via his paid Substack, the same day he also opened bearish positions in Nvidia, Applied Materials, Tesla, and the iShares Semiconductor ETF. His core argument: valuations across AI-linked stocks have reached extreme levels he hasn’t seen in 30 years. For Caterpillar specifically, he pointed to the price-to-sales ratio hitting a 30-year high.

Worth noting: as of June 30, there was no confirmed 13F filing for the CAT short. The disclosure came through his Substack post, not a regulatory filing. Scion’s next 13F will provide harder data on the exact size and structure of the position. So the signal is real, but the scale is unconfirmed.

The part people sometimes skip with Burry: being early and being wrong look identical in the short run. He was years early on the housing trade. He’s been wrong on plenty of single-name shorts. But when someone who has historically been long CAT flips to short at an all-time high, that’s not noise.

What to Watch on August 4

Consensus is currently projecting Q2 2026 EPS of roughly $6.17-6.18 and revenue near $19.16 billion. Those are big numbers. The question isn’t whether Caterpillar is a good business. It clearly is. The question is whether the execution on August 4 justifies a multiple that already has a lot of good news in the price.

• August 4 earnings are confirmed before market open
• Watch the Power and Energy segment margin specifically, which faced tariff-related pressure in Q1
• Full-year 2026 tariff costs guided to $2.2–$2.4 billion (Q1 came in at ~$600M, better than feared)
• The dividend ex-date is July 20, which creates a near-term price anchor worth noting for options positioning
• Management has discussed a multi-year ramp in large reciprocating engine capacity, but the cost of that ramp hits the income statement before the revenue does
• Resource Industries segment operating margin was 10.0% in Q1, down 700 basis points year-over-year. Watch for recovery
• Insider selling has totaled roughly $87.6 million over the past three months, according to GuruFocus data

CAT is not a bad business. It may be the best-positioned industrial company in America right now relative to where capital is flowing. What it is, near $1,033 as of June 29 close, is a business trading well above what the broad consensus math supports, in a moment where one soft data point on margins or backlog quality could compress the multiple faster than the underlying earnings growth can catch up. That’s the tension August 4 has to resolve.