Roughly one month ago, on Feb. 17, institutional investors with at least $100 million in assets under management were required to file Form 13F with the Securities and Exchange Commission. This formal-sounding filing provides investors with a way to track which stocks Wall Street's savviest money managers bought and sold in the latest quarter (in this case, the fourth quarter).
Billionaire David Tepper of Appaloosa is among the most-followed and successful fund managers. During the fourth quarter, Tepper tripled his fund's stake in memory and storage titan Micron Technology (MU +0.46%). On the other hand, he sent shares of his No. 1 holding -- and arguably one of the cheapest artificial intelligence (AI) stocks -- packing for a fourth consecutive quarter.
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Billionaire David Tepper is piling into Micron
Appaloosa's latest 13F shows that Tepper oversaw the purchase of 1 million shares of Micron during the fourth quarter. This increased the fund's position to 1.5 million shares, making Micron Appaloosa's fourth-largest holding by market value. It also booted AI kingpin Nvidia from Appaloosa's top-five holdings.
There's no doubt that AI is Micron's core growth driver at the moment. It's one of the world's primary suppliers of high-bandwidth memory (HBM). HBM is stacked with graphics processing units (GPUs) to support fast-paced computing in AI-accelerated data centers.
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Enterprise demand for AI data center infrastructure is virtually insatiable, leading to a shortage of HBM and GPUs. This combination of strong demand coupled with limited supply is affording Micron exceptional pricing power and has sent its gross margin to the heavens (56% in the fiscal first quarter, ended Nov. 27, 2025, compared to 38.4% one year prior).
Tepper was likely also attracted by Micron's valuation. Even though shares have quadrupled since early August 2025, the company's projected profits have risen even faster. As of the closing bell on March 13, Micron is trading at a forward price-to-earnings (P/E) ratio of just 9.
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Appaloosa's No. 1 holding was trimmed by 57% in 2025
What may be even more eye-popping than billionaire David Tepper tripling his stake in Micron is the persistent selling of his fund's No. 1 holding, China-based Alibaba Group (BABA +4.51%). Appaloosa's billionaire boss dumped 1,312,069 shares of Alibaba during the fourth quarter and sent 57% of his fund's stake in this AI titan to the chopping block in 2025.
Profit-taking is certainly a logical reason for this selling. Since Tepper opened a sizable position in Alibaba during the second quarter of 2023, shares of the company have soared from the $80s to as high as $192. It's possible Appaloosa's head investor was simply booking profits last year.
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However, there may be more to this story than just benign profit-taking. Tepper may be turned off by President Donald Trump's tariff and trade policy, which has seemingly widened the trade rift between China and the U.S. Although Alibaba is a China-focused company, geopolitical turbulence can still adversely impact it.
Tepper might also view Alibaba as less of a bargain than he has in the past. While its forward P/E of 15 remains historically cheap for an AI stock, especially factoring in the company's cash-rich balance sheet, it's a notably higher forward P/E for Alibaba than in recent years.
