David Tepper Reduces Nvidia Stake, Increases Micron Holdings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 19 2026
0mins
Should l Buy MU?
Source: Fool
- Nvidia Stake Reduction: David Tepper sold 200,000 shares of Nvidia in Q4, reducing his holdings to 1.7 million shares, which dropped Nvidia from Appaloosa's fourth-largest position to seventh, indicating concerns about an AI bubble and competitive pressures.
- Micron Technology Increase: Tepper purchased 1 million shares of Micron during Q4, tripling his position in just three months, reflecting confidence in the potential 32-fold growth of the high-bandwidth memory market.
- Strong Market Demand: As the world's second-largest supplier of high-bandwidth memory, Micron benefits from strong demand for AI infrastructure, leading to an 18-percentage-point increase in gross margin in Q1 and a 160% year-over-year increase in operating cash flow, showcasing its pricing power.
- Attractive Valuation: Despite Micron's stock price nearly quadrupling since September, its forward P/E ratio remains below 10, attracting successful investors like Tepper, indicating continued investment appeal in the AI sector.
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Analyst Views on MU
Wall Street analysts forecast MU stock price to fall
26 Analyst Rating
24 Buy
2 Hold
0 Sell
Strong Buy
Current: 367.850
Low
235.00
Averages
336.12
High
500.00
Current: 367.850
Low
235.00
Averages
336.12
High
500.00
About MU
Micron Technology, Inc. provides memory and storage solutions. The Company delivers a portfolio of high-performance dynamic random-access memory (DRAM), NAND, and NOR memory and storage products through its Micron and Crucial brands. The Company's products enable advancing in artificial intelligence (AI) and compute-intensive applications. Its segments include Cloud Memory Business Unit (CMBU), Core Data Center Business Unit (CDBU), Mobile and Client Business Unit (MCBU) and Automotive and Embedded Business Unit (AEBU). CMBU is focused on memory solutions for large hyperscale cloud customers, and high bandwidth memory (HBM) for all data center customers. CDBU is focused on memory solutions for mid-tier cloud, enterprise, and OEM data center customers and storage solutions for all data center customers. MCBU is focused on memory and storage solutions for mobile and client segments. AEBU is focused on memory and storage solutions for the automotive, industrial, and consumer segments.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Micron Shares Drop 20% Amid Demand Concerns
- Supply-Demand Tightness: Micron (MU) management indicates that the supply-demand balance for DRAM and NAND will remain tight beyond 2026, with DRAM shipments only up mid-single digits and NAND up low-single digits sequentially, while ASPs for DRAM and NAND surged by mid-60% and high-70%, respectively, highlighting risks in earnings driven by pricing.
- Overblown Market Reaction: Analyst Dmytro Lebid argues that the market is overestimating the risks of a demand slowdown, overlooking the fact that AI infrastructure is still in its formative stages, leading to a classic disconnect between short-term market panic and long-term fundamental value, potentially offering a buying opportunity for investors.
- Capital Expenditure Necessity: While there are concerns about Micron's increased capital expenditures, Lebid believes this is a necessary decision for the company to keep pace with rapidly growing memory demand, particularly from giants like Nvidia, which will further drive margin growth.
- Future Outlook: Analyst Oliver Rodzianko suggests that Micron's future success hinges on its ability to scale production, and if it can gradually ramp up output through 2027-2028, MU has a real chance of outperforming previous memory cycles, although it remains a risky time to enter the stock.
See More
Coatue Management Increases Stake in Applied Materials Amid AI Boom
- Investment Strategy Shift: Coatue Management nearly doubled its stake in Applied Materials in Q4, reflecting confidence in the surge of semiconductor equipment demand driven by AI accelerator chips, with the company expecting over 20% growth in its equipment business this year.
- Core Investment Changes: Coatue began reducing its position in CoreWeave, its largest holding, in Q3 and fully disposed of it in Q4, coinciding with a 50% drop in the company's stock price since October, indicating a cautious approach to risky investments.
- Optimistic Market Outlook: Applied Materials' management anticipates strong revenue acceleration over the next two years as customers expand physical capacity, with expected 25% earnings-per-share growth in 2027, making the stock appear relatively cheap at a forward P/E of just 30 times.
- Financial Health Concerns: While CoreWeave's revenue backlog soared from $15.1 billion in 2024 to $66.8 billion, the company remains cash flow negative due to rapidly growing capital expenditures, highlighting vulnerabilities in its financial structure.
See More
U.S. Markets Show Notable Weekly Gains Amid Analyst Upgrades
- UnitedHealth Group Upgrade: Raymond James upgraded UnitedHealth Group (UNH) from Market Perform to Outperform, projecting potential earnings upside of 7.5% to 8% over the next few years, indicating significant growth potential from AI initiatives and margin improvements in Optum Health.
- Akamai Downgrade: Baird downgraded Akamai Technologies (AKAM) from Outperform to Neutral, noting that despite a 33% year-to-date gain, the risk-reward profile has become more balanced, particularly with seasonal factors potentially limiting Q1 upside in its key CIS segment.
- Snowflake Coverage Initiated: Benchmark initiated coverage on Snowflake (SNOW) with a Buy rating and a $190 price target, believing the company will thrive as a leading cloud data warehouse in the ongoing enterprise AI revolution, supported by R&D spending averaging 22.8% of revenue.
- Asana Valuation Upgrade: RBC Capital Markets upgraded Asana (ASAN) from Underperform to Sector Perform, citing a more compelling valuation as it shifts to a consumption-based model, while also noting no significant disruptions from AI alternatives affecting deal cycles or sizes.
See More
Micron Technology's Stock Plummets Despite Positive Outlook
- Market Shift: In 2026, AI stocks that had been leading the market saw a sudden downturn as investors shifted towards value and small-cap stocks, indicating a dramatic change in market sentiment.
- Micron's Low Valuation: Despite Micron Technology's impressive earnings report and robust guidance last month, its stock trades at a forward P/E ratio of under 4 times fiscal 2027 estimates, reflecting market skepticism about its earnings sustainability.
- DRAM Market Dynamics: As one of the top three DRAM manufacturers, Micron benefits from a current shortage that has driven prices up, contributing to its strong performance, yet investors remain doubtful about the longevity of these market dynamics.
- Long-Term Contracts: The three major DRAM makers are signing longer-term HBM contracts of 3 to 5 years, which will raise the floor of the DRAM market and reduce cyclical fluctuations, suggesting that Micron's stock remains a viable investment after this dip.
See More
Micron Technology Stock Plummets Amid Market Rotation
- Stock Plunge: Micron Technology's stock has been severely impacted by the 2026 market rotation, despite reporting strong earnings and guidance last month, with a current forward P/E ratio below 4 times, indicating an extremely cheap valuation, yet investors are skeptical about its earnings sustainability.
- DRAM Market Dynamics: As one of the top three DRAM manufacturers, Micron's low valuation stems from the cyclical nature of the DRAM market; although there is currently a shortage driving prices up, investors doubt the longevity of these dynamics.
- Structural Growth Drivers: The emergence of high bandwidth memory (HBM) is driving the DRAM market, particularly linked to the build-out of AI chip clusters, representing a structural growth factor that contrasts sharply with typical commodity trends and may alter the cyclical nature of the market.
- Long-Term Contracts: The three major DRAM manufacturers are signing 3 to 5-year long-term contracts for HBM with volume commitments, a stark contrast to the previous yearly or quarterly agreements, which is expected to raise the floor of the DRAM market and reduce cyclical fluctuations.
See More
Micron Technology Emerges as a Key Player in AI Chip Market
- Surging Market Demand: As the demand for high-bandwidth memory (HBM) in AI models continues to rise, Micron Technology's stock has surged 309% over the past 12 months, highlighting its critical role in AI infrastructure.
- Growing Capital Expenditure: The five major hyperscalers are projected to spend $700 billion on AI infrastructure by 2026, providing robust market support for Micron's memory and storage chips, further driving its business growth.
- Supply Chain Transformation: Micron not only supplies dynamic random access memory (DRAM) and NAND flash but is also actively expanding its manufacturing capacity to meet the increasing computational demands, thereby solidifying its competitive edge in the AI chip sector.
- Optimistic Industry Outlook: Although Micron's applications are more specialized compared to Nvidia, its importance in the AI revolution is becoming increasingly evident, and it is expected to continue benefiting from the long-term tailwinds of accelerated capital expenditures from big tech.
See More
Micron Shares Drop 20% Amid Demand Concerns
- Supply-Demand Tightness: Micron (MU) management indicates that the supply-demand balance for DRAM and NAND will remain tight beyond 2026, with DRAM shipments only up mid-single digits and NAND up low-single digits sequentially, while ASPs for DRAM and NAND surged by mid-60% and high-70%, respectively, highlighting risks in earnings driven by pricing.
- Overblown Market Reaction: Analyst Dmytro Lebid argues that the market is overestimating the risks of a demand slowdown, overlooking the fact that AI infrastructure is still in its formative stages, leading to a classic disconnect between short-term market panic and long-term fundamental value, potentially offering a buying opportunity for investors.
- Capital Expenditure Necessity: While there are concerns about Micron's increased capital expenditures, Lebid believes this is a necessary decision for the company to keep pace with rapidly growing memory demand, particularly from giants like Nvidia, which will further drive margin growth.
- Future Outlook: Analyst Oliver Rodzianko suggests that Micron's future success hinges on its ability to scale production, and if it can gradually ramp up output through 2027-2028, MU has a real chance of outperforming previous memory cycles, although it remains a risky time to enter the stock.
See More
Coatue Management Increases Stake in Applied Materials Amid AI Boom
- Investment Strategy Shift: Coatue Management nearly doubled its stake in Applied Materials in Q4, reflecting confidence in the surge of semiconductor equipment demand driven by AI accelerator chips, with the company expecting over 20% growth in its equipment business this year.
- Core Investment Changes: Coatue began reducing its position in CoreWeave, its largest holding, in Q3 and fully disposed of it in Q4, coinciding with a 50% drop in the company's stock price since October, indicating a cautious approach to risky investments.
- Optimistic Market Outlook: Applied Materials' management anticipates strong revenue acceleration over the next two years as customers expand physical capacity, with expected 25% earnings-per-share growth in 2027, making the stock appear relatively cheap at a forward P/E of just 30 times.
- Financial Health Concerns: While CoreWeave's revenue backlog soared from $15.1 billion in 2024 to $66.8 billion, the company remains cash flow negative due to rapidly growing capital expenditures, highlighting vulnerabilities in its financial structure.
See More
U.S. Markets Show Notable Weekly Gains Amid Analyst Upgrades
- UnitedHealth Group Upgrade: Raymond James upgraded UnitedHealth Group (UNH) from Market Perform to Outperform, projecting potential earnings upside of 7.5% to 8% over the next few years, indicating significant growth potential from AI initiatives and margin improvements in Optum Health.
- Akamai Downgrade: Baird downgraded Akamai Technologies (AKAM) from Outperform to Neutral, noting that despite a 33% year-to-date gain, the risk-reward profile has become more balanced, particularly with seasonal factors potentially limiting Q1 upside in its key CIS segment.
- Snowflake Coverage Initiated: Benchmark initiated coverage on Snowflake (SNOW) with a Buy rating and a $190 price target, believing the company will thrive as a leading cloud data warehouse in the ongoing enterprise AI revolution, supported by R&D spending averaging 22.8% of revenue.
- Asana Valuation Upgrade: RBC Capital Markets upgraded Asana (ASAN) from Underperform to Sector Perform, citing a more compelling valuation as it shifts to a consumption-based model, while also noting no significant disruptions from AI alternatives affecting deal cycles or sizes.
See More
Micron Technology's Stock Plummets Despite Positive Outlook
- Market Shift: In 2026, AI stocks that had been leading the market saw a sudden downturn as investors shifted towards value and small-cap stocks, indicating a dramatic change in market sentiment.
- Micron's Low Valuation: Despite Micron Technology's impressive earnings report and robust guidance last month, its stock trades at a forward P/E ratio of under 4 times fiscal 2027 estimates, reflecting market skepticism about its earnings sustainability.
- DRAM Market Dynamics: As one of the top three DRAM manufacturers, Micron benefits from a current shortage that has driven prices up, contributing to its strong performance, yet investors remain doubtful about the longevity of these market dynamics.
- Long-Term Contracts: The three major DRAM makers are signing longer-term HBM contracts of 3 to 5 years, which will raise the floor of the DRAM market and reduce cyclical fluctuations, suggesting that Micron's stock remains a viable investment after this dip.
See More
Micron Technology Stock Plummets Amid Market Rotation
- Stock Plunge: Micron Technology's stock has been severely impacted by the 2026 market rotation, despite reporting strong earnings and guidance last month, with a current forward P/E ratio below 4 times, indicating an extremely cheap valuation, yet investors are skeptical about its earnings sustainability.
- DRAM Market Dynamics: As one of the top three DRAM manufacturers, Micron's low valuation stems from the cyclical nature of the DRAM market; although there is currently a shortage driving prices up, investors doubt the longevity of these dynamics.
- Structural Growth Drivers: The emergence of high bandwidth memory (HBM) is driving the DRAM market, particularly linked to the build-out of AI chip clusters, representing a structural growth factor that contrasts sharply with typical commodity trends and may alter the cyclical nature of the market.
- Long-Term Contracts: The three major DRAM manufacturers are signing 3 to 5-year long-term contracts for HBM with volume commitments, a stark contrast to the previous yearly or quarterly agreements, which is expected to raise the floor of the DRAM market and reduce cyclical fluctuations.
See More
Micron Technology Emerges as a Key Player in AI Chip Market
- Surging Market Demand: As the demand for high-bandwidth memory (HBM) in AI models continues to rise, Micron Technology's stock has surged 309% over the past 12 months, highlighting its critical role in AI infrastructure.
- Growing Capital Expenditure: The five major hyperscalers are projected to spend $700 billion on AI infrastructure by 2026, providing robust market support for Micron's memory and storage chips, further driving its business growth.
- Supply Chain Transformation: Micron not only supplies dynamic random access memory (DRAM) and NAND flash but is also actively expanding its manufacturing capacity to meet the increasing computational demands, thereby solidifying its competitive edge in the AI chip sector.
- Optimistic Industry Outlook: Although Micron's applications are more specialized compared to Nvidia, its importance in the AI revolution is becoming increasingly evident, and it is expected to continue benefiting from the long-term tailwinds of accelerated capital expenditures from big tech.
See More
