Billionaire David Tepper’s Top 5 Stock Picks

1. Micron Technology (NASDAQ:MU)

Number of Hedge Fund Holders: 87     

Micron Technology (NASDAQ:MU) is ranked first on our list of top 10 stocks pick of billionaire David Tepper. The firm markets memory and storage products. It is headquartered in Idaho. 13F filings reveal that Appaloosa Management LP owned 5.6 million shares in the company at the end of the second quarter of 2021 worth $480 million, representing 9.94% of the portfolio. 

On September 29, investment advisory Citi maintained a Buy rating on Micron Technology (NASDAQ:MU) stock with a price target of $120. Christopher Danely, an analyst at the advisory, issued the ratings update. 

At the end of the second quarter of 2021, 87 hedge funds in the database of Insider Monkey held stakes worth $6.3 billion in Micron Technology (NASDAQ:MU), down from 100 in the preceding quarter worth $7.6 billion.

In its Q1 2021 investor letter, Bonsai Partners, an asset management firm, highlighted a few stocks and Micron Technology (NASDAQ:MU) was one of them. Here is what the fund said: 

“Micron is a manufacturer of memory semiconductor chips. Micron appreciated 17.3% during the quarter.

With the semiconductor cycle in full swing, sentiment continued to improve for major DRAM and NAND suppliers. Spot pricing for DRAM continues its upward march due to supply shocks across the industry and sustained demand levels that continue to outstrip supply.

As a result, Micron showed improving results for the fiscal first quarter, raised guidance intra-quarter for the fiscal second quarter, and offered strong guidance for the fiscal third quarter in both growth and margins.

While the cyclical nature of DRAM hasn’t changed, the cycles themselves continue to become more benign, leading to long-term economic improvement across these businesses. Micron is now continuously profitable, with industry players in a dramatically stronger position than even just five years ago.

The biggest negative surprise in the quarter came from Micron’s exit from its 3D XPoint hybrid memory business. The company also announced its decision to sell its accompanying Utah fab. Fortunately, this development does not alter the investment thesis much since 3D XPoint was an option ticket for future growth. While it’s unfortunate this product didn’t pan out, now is an excellent time to sell a fab, so perhaps it is a blessing in disguise?”

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