Billionaire David Tepper of Appaloosa Slashed His Micron Stake and Piled Into a "Fabulous" AI Stock for a 6th Consecutive Quarter

You might not realize it, but Friday, Aug. 14, marked one of the most important data releases of the quarter. Form 13F filings, due Aug. 14, enable investors to track which stocks Wall Street's brightest money managers, including billionaire David Tepper of Appaloosa, bought and sold in the latest quarter.

Tepper is known for his long-term vision, focus on value, and penchant for packing Appaloosa's portfolio with companies at the forefront of Wall Street's hottest trends, such as artificial intelligence (AI). During the second quarter, Appaloosa's 13F shows that Tepper slashed his fund's position in semiconductor titan Micron Technology (NASDAQ: MU) and purchased shares of global chip-fabrication leader Taiwan Semiconductor Manufacturing (NYSE: TSM) for a sixth consecutive quarter.

Appaloosa's David Tepper is making big moves in the AI arena. Image source: Getty Images.

David Tepper pared down his second-largest holding by 41%

Despite exiting a dozen positions, including Sandisk, the most eyebrow-raising move of the June-ended quarter might be the disposition of 690,000 shares of Micron. Though it remains Appaloosa's second-largest holding by market value, the position was slashed by 41% during the quarter.

The likeliest reason behind this selling is profit-taking. Shares of Micron more than tripled during the second quarter to north of $1,200 per share. For context, Micron has been a pretty consistent holding for Tepper's fund since mid-2023. Micron's shares are up around 1,300% since then.

But profit-taking might not be the complete story.

For instance, every next-big-thing technology for more than three decades has endured an early innings bubble-bursting event. Even though demand for Micron's high-bandwidth memory is off the charts and seemingly booked well in advance, history tells us that it'll take years for businesses to optimize their AI solutions. If the AI bubble bursts, Micron is a prime candidate to feel the pinch.

Image source: Getty Images.

Appaloosa's billionaire chief can't stop buying TSMC

On the other hand, David Tepper simply can't stop gobbling up shares of Taiwan Semiconductor, commonly known as "TSMC." He scooped up 322,500 additional shares of TSMC in the June-ended quarter, increasing Appaloosa's position by 24%. It was also the sixth straight quarter that Tepper purchased TSMC's shares.

The lure of TSMC is that it's foundational to the AI Infrastructure build-out (although the same argument can be made about Micron). As of Sept. 30, 2025, Taiwan Semi accounted for nearly three-quarters of global foundry market share.

TSMC has a 72% monopoly over the AI industry.

As a result, they're growing AI revenues by +50% CAGR, and could hit an operating margin of 54-56% by early 2026.$TSM pic.twitter.com/XTygAnhCKQ

-- Qualtrim (@qualtrim) February 14, 2026

TSMC is doing everything it can to expand its chip fabrication capacity to increase the supply of graphics processing units (GPUs). But as long as demand for GPUs outpaces their supply, TSMC should command exceptional pricing power. As advanced chip production grows into a larger percentage of TSMC's revenue mix, the company's margins can expand.

Nevertheless, Taiwan Semiconductor Manufacturing faces many of the same headwinds as Micron. Although it has a veritable stranglehold on contract chip manufacturing, historical headwinds are still a concern.

While contracts with brand-name companies provide cash flow visibility several quarters into the future, a shift in investor sentiment, or even an interest rate hike by the Fed, could slow or stymie the parabolic growth we've become accustomed to in the AI arena.

Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.