Wall Street Tycoon Tepper Bets on AI: Micron Holdings Surge 200%, Newly Buys Korean ETF

David Tepper of Appaloosa Management made a major bet on artificial intelligence-related investments in the fourth quarter of last year, significantly increasing his holdings in Micron Technology and establishing new positions in Korean stocks. Both investments have performed strongly this year.

The billionaire hedge fund manager boosted his position in Micron Technology to $428 million, a 200% increase, making this key AI system memory chip manufacturer the fourth-largest holding in the fund, according to InsiderScore data. A global memory shortage has driven Micron's stock price up nearly 30% this year.

Meanwhile, Tepper established a $182.3 million position in the iShares MSCI Korea ETF (EWY). This ETF primarily holds major chip giants such as Samsung Electronics and SK Hynix. It has surged 34% this year, hitting new highs last week, and is attracting investors seeking overseas beneficiaries of the AI boom.

The strong performance of these chip-related investments stands in stark contrast to other market sectors. Software stocks have plummeted this year, as investors worry that the latest AI models will disrupt the industry's reliance on high-fee business models.

Tepper's investment in Micron Technology reflects strong confidence in AI infrastructure. In addition to raising his stock holdings to $428 million, he also purchased call options on Micron with a notional value of $71.4 million. However, it is currently unclear whether he has sold these contracts or when they expire.

The global memory shortage has become a key driver behind Micron's soaring stock price. As a main producer of the computer memory needed for AI systems, Micron directly benefits from the surge in demand caused by the AI boom.

Tepper's investment in the Korea ETF gives him exposure to Samsung Electronics and SK Hynix, the two companies that dominate the ETF's structure. Investors are looking overseas for AI supply chain beneficiaries, making Korean chipmakers increasingly attractive.

The ETF's 34% rise this year reflects the market's recognition of Asian chip manufacturers' role in the AI wave. This performance contrasts with the weakness seen in US tech stocks.

Alibaba remains Appaloosa's top holding, even though Tepper reduced his position by 20% in the fourth quarter. The Chinese internet giant has risen by 6% this year.

Alphabet is the fund's second-largest holding, with Tepper increasing his stake by about 29%. However, Alphabet has underperformed this year, dragged down by the overall pressure on the tech sector.

These portfolio adjustments show that Tepper is reallocating assets, shifting from traditional tech stocks to chip manufacturers that more directly benefit from AI infrastructure development.