According to Appaloosa Management’s latest 13F filing, David Tepper reduced his stake in Micron Technology from roughly 10% of the fund’s equity portfolio during the 2020–2021 memory shortage to just over 1% by the end of last quarter. The fund took profits following Micron’s pre-announcement of third-quarter results, which highlighted robust pricing power for its memory products and sent the stock higher. Tepper’s move reflects a cautious approach to the cyclical memory market, acknowledging that current supply constraints could reverse and pressure margins over the medium term.

Micron reported first-quarter fiscal 2026 revenue of $13.6 billion, a 57% year-over-year increase, driven by booming demand for high-bandwidth memory (HBM) used in AI data centers, automotive systems and advanced computing applications. The company is sold out of its entire HBM production through calendar 2026, underscoring a severe supply-demand imbalance. Management forecasts gross margins expanding from 57% in Q1 to approximately 68% in Q2, as higher pricing and volume contracts with leading AI chipmakers drive profitability.

Despite a 260% rally over the past year, Micron trades at a forward price-to-earnings multiple near 12, well below the industry average. Wall Street projects annualized earnings growth of around 50% over the next three years, supported by multiyear supply agreements and planned capacity expansions totaling over $200 billion in new U.S. fabrication investments. Analysts caution that an eventual oversupply could compress pricing, but consensus forecasts still call for double-digit earnings per share growth in both 2026 and 2027, presenting a compelling risk-reward profile for value-focused investors.