David Tepper of Appaloosa Management made significant bets on artificial intelligence-related investments in the fourth quarter, substantially increasing his holdings in Micron Technology and establishing a new position in Korean equities, both of which have performed strongly this year.
The billionaire hedge fund manager raised his stake in Micron Technology to $428 million, a 200% increase, making the key memory chip manufacturer for AI systems the fund's fourth-largest holding, according to InsiderScore data. A global memory shortage has driven Micron's stock price up nearly 30% this year.
Simultaneously, Tepper established a new $182.3 million position in the iShares MSCI South Korea ETF (EWY). This ETF, which primarily holds chip giants like Samsung Electronics and SK Hynix, has surged 34% this year, reaching a new high last week and attracting investors seeking overseas beneficiaries of the AI trend.
The robust performance of these chip-related investments contrasts sharply with other market sectors. Software stocks have declined significantly this year as investors worry that the latest AI models could disrupt the industry's reliance on high-fee business models.
**Increasing Bets on Memory Chips**
Tepper's investment in Micron Technology demonstrates strong confidence in AI infrastructure. Beyond boosting the equity stake to $428 million, he also purchased call options with a notional value of $71.4 million on Micron. It remains unclear whether he has sold these contracts or their expiration dates.
The global memory shortage has been a key driver behind Micron's soaring stock price. As a primary producer of computer memory required for AI systems, Micron directly benefits from the demand surge created by the artificial intelligence boom.
**Targeting Korean Chip Leaders**
Tepper's investment in the Korean ETF provides exposure to Samsung Electronics and SK Hynix, which dominate the ETF's holdings. Investors are looking overseas to find beneficiaries of the AI supply chain, leading to increased favor for Korean chip manufacturers.
The ETF's 34% gain this year reflects market recognition of Asian chipmakers' role in the AI wave. This performance contrasts with the weakness seen in U.S. technology stocks.
**Other Major Portfolio Adjustments**
Alibaba remains Appaloosa's top holding, although Tepper reduced the position by 20% in the fourth quarter. The Chinese internet giant's stock has risen 6% this year.
Alphabet is the fund's second-largest holding, with Tepper increasing the stake by approximately 29%. However, Alphabet has underperformed this year, weighed down by broader pressure in the technology sector.
These portfolio adjustments indicate Tepper is reallocating assets away from traditional tech stocks toward chip manufacturers that more directly benefit from AI infrastructure development.