Michael Burry warned on Wednesday that current boom conditions in select stocks could leave "future ghost towns" once current shortages and pricing power fade.
Burry said "there are shortages" right now, that Caterpillar (NYSE:CAT) is "doing unbelievably well," that Palantir Technologies (NASDAQ:PLTR) is "really filling acute CYA needs," and that Nvidia (NASDAQ:NVDA)’s "margins & prices really cause nosebleeds."
Burry’s reference to “ghost towns” evokes the historical era of the American 19th-century gold rushes. During a gold rush, prospectors would frantically flood into remote regions, spawning bustling, temporary boomtowns filled with immense wealth and activity almost overnight.
However, once the gold deposits were inevitably depleted, the excitement vanished just as quickly, leaving behind completely abandoned, desolate “ghost towns.” By comparing current high-flying tech and industrial stocks to a gold rush, Burry is warning that today’s booming market demand is temporary and unsustainable—suggesting that once the frenzy cools, these thriving sectors will similarly turn into hollowed-out ruins.
Caterpillar Rallies on Data-Center Buildout
Caterpillar has been trading at higher earnings multiples than Nvidia, driven by its role in the AI infrastructure buildout. Investors see Caterpillar as a key player in the construction of data centers and semiconductor plants.
Shares have surged over 23% in the past month and nearly 78% year to date.
Burry Shorts Nvidia, Tesla and Caterpillar
To hedge against potential downturns, Burry has taken short positions on several tech giants, including Nvidia and Tesla. He believes the semiconductor boom is nearing its end, citing the Philadelphia Semiconductor Index‘s high extension above its 200-day moving average.
Burry also shorted Caterpillar at $1060.98, saying he doubts how much AI-driven construction demand is already priced into the stock.
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