David Tepper’s hedge fund reduced its stake in Micron Technology by over 90% between mid-2020 and the end of Q3 2025. At its peak during the semiconductor shortage, Micron accounted for approximately 10% of Appaloosa’s equity portfolio; by September 30, 2025 that exposure had fallen to just over 1%. The move follows Micron’s pre-announcement of Q3 revenue growth of 57% year-over-year to $13.6 billion, which drove the stock higher and provided an opportune moment for Tepper to realize gains in a notoriously cyclical market.

Micron Technology has sold out its entire high-bandwidth memory (HBM) production for calendar 2026, reflecting an unprecedented supply-demand imbalance in the AI memory market. In Q1 FY2026, Micron reported gross margins near 57% and guided for margins to expand to roughly 68% in Q2, underscoring strong pricing power. The company is investing over $200 billion to expand U.S. fabrication capacity with new facilities in Idaho and New York and an expansion in Virginia, positioning it to alleviate bottlenecks over the next several years.

Despite a 260% gain over the past 12 months, Micron trades at a forward price-to-earnings ratio of approximately 12, well below the sector average in the mid-20s. Wall Street consensus projects Micron’s earnings per share to rise by nearly 294% in the current year to $32.67 and another 27% to $41.54 next year. With analysts’ average price targets ranging between $350 and $450, the stock offers upside potential if the AI memory shortage persists and the company secures multiyear supply contracts.