Billionaire David Tepper's Appaloosa fund cut its Micron stake by 41% while buying TSMC shares for the sixth straight quarter, signaling confidence in TSMC's dominance of chip fabrication for AI.
TSMC holds nearly three-quarters of global foundry market share as of Sept.
30, 2025, and is growing AI revenues at +50% CAGR with a potential operating margin of 54–56% by early 2026, though both semiconductor firms face risk if AI demand growth slows.
What happened
Billionaire David Tepper's Appaloosa fund slashed its Micron Technology position by 41% in the second quarter while purchasing 322,500 additional shares of Taiwan Semiconductor Manufacturing (TSMC) for the sixth consecutive quarter, increasing that position by 24%.
Why it matters
The moves reflect Tepper's bet that TSMC—which holds nearly three-quarters of global foundry market share as of Sept. 30, 2025—is better positioned than Micron to capitalize on AI infrastructure growth. Though Micron shares tripled during the quarter to north of $1,200, the profit-taking may also signal concern that AI demand could face the same early bubble-bursting pattern that has hit every major technology wave over the past three decades.
What to watch
TSMC is growing AI revenues by +50% CAGR and could hit an operating margin of 54–56% by early 2026, but both companies face headwinds if investor sentiment shifts or the Federal Reserve raises rates, which could slow the parabolic AI growth investors have grown accustomed to.
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David Tepper's latest 13F filing, due Aug. 14, reveals a strategic recalibration in his AI-focused portfolio. While Tepper has built a reputation for identifying companies at the forefront of Wall Street's hottest trends, his simultaneous retreat from Micron and continued accumulation of TSMC suggests a nuanced view of semiconductor concentration risk. Micron's 1,300% gain since mid-2023 and its near-tripling in just the second quarter alone create a compelling profit-taking case; yet the timing of the 41% reduction—paired with ongoing TSMC buying—hints at deeper conviction about competitive positioning. TSMC's dominance, holding nearly three-quarters of global foundry market share as of Sept. 30, 2025, and its +50% CAGR AI revenue growth, appear to have persuaded Tepper that TSMC offers more durable moat and pricing power than Micron's high-bandwidth memory business, even as both face potential headwinds from a shift in investor sentiment or Federal Reserve policy changes that could disrupt the parabolic AI growth trajectory.
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