Caterpillar's High Valuation Attracts Short Seller Michael Burry Amid Strong Performance
Caterpillar Inc. (NYSE:CAT) has seen strong performance in 2026, with a year-to-date return of nearly 48%, driven by increased demand for on-site power generation due to the rapid expansion of AI data centers. The company reported Q1 revenue of $17.4 billion and an adjusted EPS of $5.54, exceeding expectations. Caterpillar's order backlog reached a record $63 billion in Q1 2026, up significantly year-over-year and sequentially. Despite this growth, the company faces margin pressures due to rising tariff costs, with Resource Industries segment margins falling by over 700 basis points in Q1 alone. Analysts at Oppenheimer raised Caterpillar's price target from $980 to $1,105 while maintaining an Outperform rating. Michael Burry of Scion Asset Management has taken a short position against Caterpillar due to its high valuation metrics—trading at over 3x historical multiples and significantly above peers. He argues that the stock's AI-driven rally may be unsustainable given cyclical industry dynamics.
Tickers: $CAT
Topics: AI infrastructure backlog Caterpillar data centers earnings electric grid