Tepper Loads Up on Big Tech, Exits Memory Chip Investments

David Tepper's Appaloosa Management has shifted its investment focus towards megacap tech stocks in Q2, trimming or exiting positions in memory chip investments. The 13-F filing for the quarter ended June shows that Tepper cut his stake in Micron Technology Inc. (NASDAQ:MU) by over 41% to about $1.125 billion.

However, despite slashing the stake in Micron, the position's value nearly doubled to $1.125 billion as Micron shares surged 242% in Q2, fueled by strong AI memory demand and record results.

Micron Technology Inc. is experiencing a tight DRAM supply due to AI-driven demand, despite capacity expansions by Samsung Electronics Co. Ltd. (OTC:SSNLF) and SK Hynix Inc. (NASDAQ:SKHY). Counterpoint Research expects meaningful supply relief only by 2028 at the earliest.

Trivariate Research's Adam Parker believes that tight memory supply could extend Micron's earnings cycle, with markets underestimating Micron's earnings durability and free cash flow potentially approaching $300 billion over two years. Cantor Fitzgerald analyst CJ Muse expects Sandisk to generate about $150 billion in free cash flow over four years.

In contrast, David Tepper's Appaloosa significantly increased its bets on the Magnificent Seven, boosting Amazon.com Inc. (NASDAQ:AMZN), Meta Platforms Inc. (NASDAQ:META) and Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) holdings, and creating a position of over $241 million in Apple Inc. (NASDAQ:AAPL).