NoName
Trader Since 2018, Bitcoin, Stocks, DeFi & Macro
Caterpillar has been repriced from a century-old industrial into an AI growth stock at peak euphoria, and insiders who see that as temporary sold $87 million of shares in three months. The rerating came as hyperscalers ordered its engines and generators to power AI data centers. The stock now sits at Livermore's point 9, the test before selling short, as the market enters a correction phase. x.comÂ
Caterpillar looks like a prime short because it trades on AI-style hype without earnings to match. Its quarter-on-quarter numbers aren't proving out: last quarter it earned less than last September, and revenue versus last year doesn't look great. The stock ran up hard even with rates at their peak and likely to stay there for a while. x.com x.com x.comÂ
Caterpillar is an easy short because its price assumed revenue would double, and 24% growth is underwhelming by comparison. That stands even after the stock jumped premarket on what @brent_e_trader called a huge earnings beat and raise. x.comÂ
Caterpillar's strong fundamentals should eventually help its shares find support once investors agree on a new multiple. The stock is down 35% from its peak after a parabolic run; continued separation of gross profit from operating expenses would be welcome. x.comÂ
Caterpillar is priced like a turbo-charged Walmart, which is worse for a cyclical company. A quoted post notes it trades at 35x next-twelve-month earnings while EPS estimates are at a record high; its past three big buying opportunities came at about 30x at notable earnings troughs. x.comÂ
Caterpillar is trading on P/E and valuation expansion rather than growth, with 2026 revenue the same as in 2023. It will be attractive to short after its stock split; for now, put premiums are too high. x.comÂ
Caterpillar's dip below Wall Street's average price target is a rare opportunity after a massive second-quarter double beat. Adjusted EPS was $8.17 against a $5.71 estimate, and sales were $20.5 billion against $18.36 billion expected. x.comÂ
Caterpillar has stretched too far on valuation relative to its main peers, especially Cummins. United Rentals, despite less direct exposure to data centers, is still catching up on multiples. x.comÂ
Caterpillar looks set to drop hard after a parabolic move. The stock is not cheap, margins are stretched and buyers chased it, which explains why Michael Burry shorted it here. If Burry has called the top, he would close the short around $579. x.comÂ
Caterpillar is still undervalued, with about 25% upside tied to its visible backlog and AI and energy demand. Its autonomous mining technology is just getting started. x.com x.comÂ
Debt-funded AI building is making tech stocks vulnerable to a 25-30% pullback as rates and energy prices rise. AI company borrowing reached $466B this year versus $101B a year earlier; weekly default-insurance trading on seven AI names rose from under $2B in July to over $9B in September. Keep cash for lower prices, though 30% earnings growth and a 19x market multiple argue this is not an AI bubble. x.comÂ
