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. This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.
For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » 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. 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%.
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