David Tepper sold 41% of his Micron Technology stake in Q2 and it remained his second-largest position. Appaloosa Management's 13F filing shows $3.1 billion—40% of the fund's $7.7 billion in reportable assets—now sits in Amazon, Micron, and Taiwan Semiconductor. The filing does not explain. The position sizes do.
Micron rallied 242% in the quarter. Tepper sold 4.1 million shares and still holds enough to make it his second-biggest bet. Amazon is first. Taiwan Semiconductor is third. Together, the three represent a clean thesis: AI needs memory, logistics, and fabrication. Appaloosa is not betting on software margin. It is betting on the companies that ship and build the chips that make the software possible. The 13F shows no new mega-cap additions. The portfolio contracted around three names.
The trim matters more than the headline sale figure. Selling 41% of a position after a 242% move is textbook rebalancing, not capitulation. The position still weighs enough to move the fund's monthly return. That is intentional. Tepper has spent three decades in volatility. He does not accidentally leave $500 million in a single semiconductor stock. The kept stake is the signal. It says he thinks Micron's gross margin expansion is structural, not cyclical, and that high-bandwidth memory pricing has another twelve months of firmness. He is wrong or he is early. He is not hedging.
The Amazon position is less discussed and more significant. It is the largest holding in a portfolio that historically rotated faster than this. Amazon's cloud infrastructure revenue grew 19% year-over-year in Q2. Its capital expenditure guidance for AI-related infrastructure is $75 billion through 2025. Tepper is not buying Amazon for retail margin or for AWS's operating income today. He is buying it because Amazon will spend more on NVIDIA and Broadcom chips than any company except Microsoft, and it will monetize that spend through inference workloads that have not yet been priced into sell-side models. The position size suggests he thinks AWS's AI revenue run-rate is currently understated by 30% to 40%.
Taiwan Semiconductor is the physical dependency. If Amazon and Micron are betting on demand, TSMC is betting on the fact that there are only two companies on Earth that can fabricate chips below 5 nanometers at scale, and the other one is in South Korea. TSMC's Q2 revenue grew 33% year-over-year. Its Arizona fabs are 18 months behind schedule. Its customers are paying deposit premiums to lock multi-year wafer allocations. Tepper is betting that TSMC's pricing power persists through 2026, and that U.S. customers will pay a 15% to 20% premium for Arizona-produced chips rather than navigate Taiwan Strait risk in their supply chain planning.
Allocators should watch three things. First, whether Tepper adds to TSMC in Q3 after the Arizona delay headlines. Second, whether Micron's position size stays above 6% of the portfolio through year-end, which would signal he thinks high-bandwidth memory pricing holds into 2025. Third, whether he opens a new position in ASML or Applied Materials, which would confirm he is playing the entire AI capital-expenditure stack, not just the chip designers. The 13F will print in 90 days.
Appaloosa has $7.7 billion in long equity positions and Tepper has never run a portfolio this concentrated in a single thematic bet. The last time he put 40% of the fund into three names was 2009, in Bank of America, Citigroup, and AIG. Those positions returned 780% in aggregate over 24 months. He is betting the same structure works in hardware. The counter-argument is that AI capital spending decelerates in mid-2025 when hyperscalers realize utilization rates on existing GPU clusters are below 50%. Tepper is saying that moment is 18 months away, not six.
The takeaway
Tepper's $3.1B AI bet is on infrastructure capex durability, not software multiples—watch the Q3 TSMC add.
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