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It is the 13F season, where investors get a sneak peek into where billionaires are putting their money. One of the top hedge funds, Appaloosa Management, had made significant moves in the fourth quarter. David Tepper’s fund holds only 45 stocks, but the stock movement has been noteworthy.
The billionaire understands the importance of artificial intelligence and has loaded up on hot stocks in the sector. He is known for making timely bets on high-growth stocks, and his latest filing shows an increase in positions in Meta Platforms (META | META Price Prediction), Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), and Micron Technology (NASDAQ:MU). While you mustn’t blindly follow the billionaire’s moves, it doesn’t hurt to keep a watch on where the money is flowing.
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Meta Platforms
Meta Platforms has become a hot stock due to its soaring capex for AI development. Tepper had increased his stake in the company by adding 230,000 shares of the company. He increased the position by 2.04%, taking the total holdings to 5.72%. Meta remains one of the top five holdings of the hedge fund.
The tech giant is firing on all cylinders and reported a revenue of $59.89 billion in the fourth quarter. It reported an EPS of $8.88, beating estimates. Meta Platforms is a parent company of several social media sites, and it generates the majority of its revenue from advertising on social media platforms. Its basket of social media platforms makes it a cash cow. Out of the revenue of $59 billion, $58.1 billion came from advertising. For 2026, the company is guiding for a CapEx of $115 to $135 billion for AI infrastructure.
The stock is down 1.87% and is exchanging hands for $655.66. It has a dividend yield of 0.32%. Tepper is betting on Meta’s AI investments and growing advertising revenue. However, the recent decline is due to concerns about its AI spending and the billions of dollars already spent on the metaverse. The market has seen a gap between the spend and payoff, which has led to a drop in the stock.
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Alphabet Inc.
Tepper has significantly increased his stake in Alphabet. He purchased 399,431 shares of the company, taking the holdings to 8.10% of the total portfolio. Earlier he held under 1.4 million shares and now holds about 1.8 million. He increased Alphabet’s holdings by 28.7%.
The company reported a revenue of $113.83 billion, driven by Google Cloud, which saw a 48% year-over-year growth and generated a revenue of $17.7 billion. This is the first time that Alphabet’s annual revenues exceeded $400 billion, and the management is aiming for $175 to $185 billion in CapEx for the year. The expenditure will remain focused on AI infrastructure. The company has recently overtaken Apple and Microsoft as America’s most profitable company.
Google Cloud is a financial boon for the company and is single-handedly driving revenue higher. It could represent a larger portion of its profitability in the next 5 to 10 years. As the segment keeps growing, it will manage to handle its costs well, resulting in higher margins over time.
The stock is up 73% in the past year and is exchanging hands for $314. It is one of the top-performing Magnificent Seven stocks. GOOG stock still has room to run.
Micron Technology Inc.
Micron Technology
Another interesting buy is Micron Technologies. Tepper held 500,000 shares and increased his holdings to 1.5 million by adding an impressive 1,000,000 shares. It now forms 6.18% of the total portfolio. This move is a sign that Tepper sees more upside for the stock this year.
Micron stock is already up 348% in the year and 35% year-to-date. It is exchanging hands for $428.17 right now. A pure play on AI memory demand, the chip shortages will drive revenue and growth for the company. Its memory processors are sold out for the year, and the company is investing $200 billion to build new facilities for the growing demand.
Micron has become the biggest winner of the AI boom. It has accelerated the DRAM fab expansion plans, which include two new fabs in Idaho costing a total of $50 billion. Further, it is working on a new factory near New York worth $100 billion.
Its fourth-quarter revenue came in at $13.64 billion, and the EPS stood at $4.78, beating estimates. Its data center CapEx is expected to hit $700 billion this year. While the tech giants are fighting for the top spot in the AI race, Micron Technology continues to outpace them. I believe the rally could continue this year.
