Investor Michael Burry of “The Big Short” fame has a new short target in his sights: Caterpillar, the heavy-machinery giant that has surged thanks to the AI infrastructure boom.

Burry, the former hedge fund manager who famously predicted the 2008 subprime mortgage crisis and earned hundreds of millions of dollars for his investors in the process, said Caterpillar’s stock is now overvalued after a run-up that has seen its stock soar by more than 100% over the past year.

“Caterpillar jumped out at me,” Burry wrote in a Substack post this week. “I have never shorted Caterpillar. It has always done great for me on the long side in the past.”

Times have changed. The investor said he shorted Caterpillar at $1,060.98 per share Tuesday. By Wednesday, Caterpillar shares had closed down nearly 7%. As of Thursday, shares fell by as much as 4%, hitting their lowest point since the middle of June at about $949 per share.

Yet, not everyone agrees with Burry’s call. Sergey Glinyanov, a senior analyst at Freedom Broker who covers Caterpillar, told Fortune in an email that Burry’s short position isn’t likely to affect the stock at all. What the famed investor is missing is that Caterpillar’s share price isn’t surging because of AI hype, he said.

Glinyanov told Fortune that, in fact, investors are rewarding the company because it is benefiting from a fundamental shift in infrastructure spending.

“A structural theme is emerging,” Glinyanov told Fortune, pointing to a growing demand for on-site power systems, as AI data centers look for alternatives to an aging electrical grid that cannot always keep up with soaring energy needs.

As developers build bigger and bigger AI campuses, they are increasingly seeking out the diesel and natural gas generator power systems that Caterpillar sells to secure reliable power. The company’s positioning in this area sets it up to capture a larger share of that spending, Glinyanov argues.

As AI has propelled chipmakers like Nvidia to record highs, investors have also lifted the shares of other businesses that may benefit from hyperscalers and developers’ wave of spending as they scramble to build up data centers. These companies, including GE Vernova, which specializes in power generation, and Ohio-based Vertiv, which provides advanced cooling systems have emerged as a popular way to bet on the AI revolution without buying chipmakers directly. Shares of GE Vernova are up more than 60% year-to-date, while shares of Vertiv are up 70% over the same period.

Yet, investors are betting their money that Caterpillar will be among the biggest beneficiaries. The company’s stock had climbed about 172% over the past 12 months and more than 77% this year alone before Burry disclosed his position. Its price-to-sales ratio—a measure of how much investors are willing to pay for each dollar of revenue—is now at its highest level in three decades, he added.

It’s this run-up that has Burry betting the stock is overvalued. Yet his recent short against the company also builds on his broader belief that the market is in an AI bubble. In May, Burry said the market was “feeling like the last months of the 1999-2000 bubble.” Along with his Caterpillar short, the investor also said he had refreshed his bet against the iShares Semiconductor ETF (SOXX), which tracks semiconductor companies, and had taken positions against Tesla and Nvidia.

It’s unclear, of course, whether Burry or Glinyanov will ultimately be proven right.

Glinyanov said the company’s traditional business of selling and renting heavy machinery remains healthy, with dealer inventories improving and retail demand holding up. The combination of consistency in its traditional business and its growing exposure to AI-related power infrastructure has contributed to the stock’s premium value, he said. The company’ strong results from the first quarter, which saw sales jump 22% year-over-year to $17.4 billion and beat Wall Street expectations, adds to his argument.

Even so, Glinyanov allowed that Caterpillar’s premium valuation ultimately depends on the biggest AI companies continuing to spend aggressively on new data centers and power infrastructure.

His firm’s price target for the company is $910, indicating a “potential near term pullback,” he said. If hyperscalers quickly pull back on their massive data center investments, some of the optimism surrounding Caterpillar could fade just as quickly.

“Should we observe deterioration in hyperscalers’ fundamentals—particularly cash flow generation or debt burden—multiples could face a meaningful pullback,” he said.