Billionaire David Tepper’s Appaloosa Management Has 31% of its portfolio Invested in These 2 Artificial Intelligence (AI) Stocks

Billionaire investor David Tepper of Appaloosa Management has allocated 31% of his portfolio to two artificial intelligence (AI) stocks: Micron Technology (MU) and Amazon (AMZN). These two holdings make up the majority of the AI-related investments within the fund. Micron Technology, a leader in computer memory and data storage products, has seen a surge in its share price, up more than 200% this year, due to the increasing demand for memory chips in AI applications.

However, Appaloosa reduced its stake in Micron by about 41% in the second quarter, likely to cash in on its recent gains. Currently, Micron accounts for 15.06% of the fund's public equity portfolio, which suggests Tepper and his team remain optimistic about the company's future prospects. Amazon, on the other hand, is the largest holding in Appaloosa Management's public equity portfolio, representing nearly 16% of the portfolio.

Tepper and his team boosted their stake in Amazon by about 15.7% during the second quarter. Amazon's performance has been strong, with second-quarter revenue jumping 20% year over year to $200.6 billion and net earnings per share increasing 242% from the year-ago period. The company's cloud business, Amazon Web Services, and its AI business have been particularly strong, with Amazon Web Services posting net sales of $42.2 billion, up 37% year over year.

Amazon is investing heavily in its AI capabilities, with a capital expenditure forecast of $220 billion for the current fiscal year, up from a previous projection of $200 billion. Despite the significant investment, Amazon appears to be well-positioned to monetize its AI investments over the medium term, with strong demand for its cloud services through 2028 and attractive growth opportunities in other areas, such as advertising and e-commerce.