Putnam’s suggestion of extending the scope of his semantic theory has opened an ongoing debate. The majority seem to agree with Putnam as long as he restricts his analysis to natural kind terms, whereas many doubts have arisen about whether or not it can be applied to artifactual kind terms as well. Specifically, this disagreement originated with the thought experiment that Putnam laid out in order to prove his controversial thesis. Here I analyze it in detail in order to evaluate whether it proves what it has been alleged to prove. Unlike the other authors engaged in the debate, I point out that this particular argument cannot demonstrate that artifactual words refer externalistically. I claim that, on closer inspection, Putnam’s thought experiment only shows that an artifactual term like ‘pencil’ can turn out to be a natural kind word, but, in the end, it tells us little about how our “actual” artifactual kind terms work. In order to make my point, I also bring out the two fundamental requirements that a genuine externalist argument about artifactual words ought to meet. Finally, I report, albeit briefly, the main externalist accounts in this respect, illustrating how none of them actually meet the challenge.