Billionaire Investor David Tepper Recently Dumped Appaloosa Management's Stake in Sandisk and Initiated a New Position In a Stock That Some Wall Street Experts Think Could Eventually Be Worth $10 Trillion

Appaloosa (David Tepper) exited a nearly $179M position in Sandisk (SNDK) after an extraordinary Q2 for memory amid constrained NAND supply, signaling a turn in cycle expectations. At end of Q2, Appaloosa initiated a nearly $38.5M position in Space Exploration Technologies (SpaceX/SPCX), and the stock is being driven by bullish coverage including Raymond James’ $800 price target (implying >$10T valuation) tied to Starship’s potential for vastly lower orbital delivery costs (about 99%). Overall, the move is modest in dollar terms but adds credible momentum to a highly speculative, AI-linked compute/space-data narrative.

Analysis

Tepper’s SNDK exit reads less like a structural bearish call and more like a signal that the easy money in AI memory is becoming crowded. The market mechanism is classic: when a cyclical substrate trades on scarcity, the upside is front-loaded, while the downside arrives when capex supply response catches up and multiples compress before earnings do. That makes SNDK a high-beta way to express storage tightness, but also a candidate for sharp derating if hyperscaler ordering slows even modestly over the next 1-3 months.

The SPCX buy is harder to trade directly and should be viewed as optionality on Musk-specific narrative, not an earnings-driven catalyst. If SpaceX ever reaches a repeatable launch cadence or credible data-center monetization, the read-through is more about multiple expansion in adjacent “impossible” tech names than immediate fundamentals; until then, the public-market beneficiaries are mostly sentiment proxies like TSLA and, to a lesser extent, GS if private-market monetization activity accelerates.

Contrarian angle: the consensus may be overstating the bearish signal in SNDK and understating how long AI storage scarcity can persist if inference demand keeps compounding. The more important falsifier is not the headline trade but whether memory pricing and inventory days roll over in the next two quarters; if they do not, Tepper’s exit will look tactical, not prescient. For SPCX, the falsifier is commercialization delay—without a step-up in launch frequency or financing, the valuation narrative remains a story stock, not a market structure shift.

Key Decisions for Investors

• Do not chase the Tepper signal mechanically; keep SNDK on a sell-strength watchlist for the next 1-3 months. Consider trimming only if channel checks show NAND ASPs flattening or customer inventory rising; otherwise the scarcity thesis remains intact.
• If SNDK momentum exhausts and implied volatility stays rich, use a small bearish structure in SNDK (put spread, 2-4 month tenor) rather than outright shorting. Risk/reward is best only if the stock has already priced in perfection; invalidate if pricing data re-accelerates.
• Use TSLA as the liquid public-market proxy for Musk optionality only opportunistically, not as a core expression. Best entry would be on weakness into a broader EV de-rating, with a 3-6 month horizon and a tight stop if Tesla fundamentals improve independently of the SpaceX narrative.
• Avoid forcing a direct SPCX trade in the public book; treat it as a watch item for any secondary liquidity event, launch-frequency step-up, or financing round. If those do not materialize within 6-12 months, the valuation air pocket risk rises materially.