David Tepper Exits Sandisk for Broadcom

David Tepper's move comes as Sandisk has been one of the year's most spectacular stories, with its stock up 1,230% over the past year on the memory crunch. But the market has cooled: Sandisk is down 27% from its 52-week high. In its fiscal 2026 fourth quarter, revenue surged 372% and gross margin widened to 84.6%, yet investors worry a cycle may be ending and question whether triple-digit sales growth can last. Sandisk's new business model, built on multiyear agreements, aims to lock in revenue, but the hype appears to be fading—and Tepper seems to be pocketing his gains.

Broadcom, by contrast, isn't growing nearly as fast and is much more expensive at 46 times trailing-12-month earnings, with the stock up only 7% over the past year. That lack of movement may be exactly why Tepper bought it: buying while it's down offers the greatest opportunity for gains. He also likely sees a massive opportunity in Broadcom's AI chip business, where revenue rose 86% year over year in the 2026 fiscal third quarter and AI semiconductor revenue jumped 221%. Management raised full-year AI revenue guidance from $56 billion to $58 billion and expects $115 billion in 2027 and $230 billion in 2028.