Billionaire hedge fund manager David Tepper has made another bold portfolio move, selling Appaloosa Management’s entire Sandisk (NASDAQ: SNDK) position while initiating a new stake in Broadcom (NASDAQ: AVGO).
New 13F filings reveal the trades occurred during the second quarter, offering a clear picture of how Tepper is repositioning around the artificial intelligence infrastructure buildout.
Tepper, who founded Appaloosa Management and built a legendary reputation on contrarian and distressed-asset bets, is closely watched by investors for exactly these kinds of decisive capital moves.
Sandisk, which produces NAND flash memory powering solid-state drives, had become a standout performer in the semiconductor space as AI data center demand pushed storage prices sharply higher.
Filings show that Tepper first initiated the Sandisk position during the first quarter of 2026, meaning his exit after a single quarter implies the fund captured substantial gains during one of the stock’s strongest stretches.
Taking profits after a parabolic rally signals discipline, given that memory and storage markets are cyclical and Sandisk’s valuation may already price in much of the near-term AI demand surge.
By rotating out of Sandisk, Tepper freed capital for Broadcom, a semiconductor and infrastructure software company that has spent recent years building a franchise around custom AI accelerators known as XPUs.
Broadcom designs chips alongside hyperscale customers rather than selling general-purpose products, and its portfolio includes Google’s Tensor Processing Units and Meta Platforms’ MTIA chips.
The company has also expanded relationships with OpenAI, Anthropic, and Apple, further broadening its customer base while supplying high-speed networking silicon that connects large clusters of AI accelerators.
Broadcom’s management has guided for more than $100 billion in AI semiconductor revenue by fiscal 2027, a target that underpins the stock’s premium valuation despite elevated price-to-earnings multiples.
Robust operating margins, a wide competitive moat in custom silicon, and a backlog of multi-year orders all support the case for Broadcom commanding a premium in today’s market environment.
For an investor like Tepper, the combination of visible multi-year revenue growth, sticky hyperscaler relationships, and a leading position in specialized AI hardware may outweigh concerns over rich valuations.
Sandisk’s subsequent pullback from its June peak has so far validated the timing of Tepper’s exit, though Broadcom’s elevated valuation equally leaves little margin for error going forward.
Investors considering whether to follow Tepper’s rotation should focus on his underlying thesis rather than simply copying the trade, as the logic centers on sustained AI capital expenditure from big technology companies.
Those who share conviction in long-term AI infrastructure spending may find Broadcom a compelling hold, while investors preferring pure-play memory exposure could still find opportunity in the storage sector after volatility settles.
Tepper’s latest moves reinforce a principle central to disciplined investing: even the strongest positions eventually require harvesting, and great portfolios adapt continuously rather than staying static through changing market conditions.
