David Tepper Offloads Banking Stocks in Q4 Amid a Wider Selloff; Boosts Stakes in Micron, Meta, and Microsoft

Billionaire investor David Tepper is known for his high-risk, aggressive trading style. As the founder of Appaloosa Management, Tepper has made a fortune with his contrarian calls and bets on the debts of distressed assets.

During the 2008 financial crash, when the value of banks nosedived to record lows, Tepper was heavily investing in these distressed assets. As an opportunistic hedge fund manager, he purchased nearly $2 billion worth of commercial mortgage-backed securities at face value from AIG. Soon after, he profited by $7 billion on the trade after the US government stepped in to save the banks.

He founded Appaloosa in 1993 with over $50 million in capital. The portfolio returned 57% in the first six months and continued to succeed by investing in the debt of troubled firms like Worldcom and Enron. Today, his tech-heavy equity portfolio is worth $6.9 billion. Tepper himself has amassed a personal net worth of $23.7 billion, according to Forbes.

In Q4, Tepper's hedge fund completely offloaded multiple regional US banking stocks, including Zions Bancorporation, Western Alliance Bancorp, Truist Financial, KeyCorp, Comerica, Citizens Financial Group, as well as fintech provider Fiserv Inc.

Banking stocks worldwide were rattled on Friday after fears of bad US loans and lending practices spilled over into equity markets. The fears intensified after Zions and Western Alliance disclosed bad loans. The concern builds on existing unease over lending following the bankruptcy of two auto-related firms this year.

Appaloosa also reduces its stake in Amazon, Nvidia, Qualcomm, Uber, Advanced Micro Devices, as well as multiple US defense stocks and Chinese companies like Baidu and Alibaba Group in a major reshuffle.

Alibaba faces mounting challenges as Q2 net income fell 53% year-over-year to $2.90 billion due to aggressive AI and quick-commerce spending. Even factors like Pentagon scrutiny, regulatory risks, and margin compression from stiff competition likely drove Tepper to reduce China exposure.

Boosting Stake in AI Companies, Chipmakers

In Q4, Appaloosa boosted its stake in Micron Technology by 200% or 1 million shares. It also raised its stake in the Meta stock by 62% or 230,000 shares, as well as in Microsoft by 8.1% or 37,500 shares.

Micron designs and produces memory hardware, and it is shifting its focus entirely to the AI demand for memory. The company exited the consumer PC memory market in late 2025, and in January 2026, it broke ground on a $100 billion semiconductor factory in upstate New York. Upon completion, the facility will be the largest semiconductor factory in the US. The company is also planning to invest $200 billion to ramp up its AI infrastructure buildout amid surging demand for AI workloads.

However, Meta and Microsoft shares have continued to face downward pressures in recent months amid fears of rising AI costs without equivalent results to show for. The stocks have declined by over 14% in the past six months. While investors are seeking proof that Microsoft's AI investments are resulting in product monetisation, Meta is grappling with multiple lawsuits over smart glasses and the safety of minors using its platforms.

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