Billionaire David Tepper Just Bought These 2 Artificial Intelligence (AI) Stocks That Wall Street Thinks Could Soar by 50% or More

Appaloosa Management initiated positions in newly public SpaceX and AI-computing provider CoreWeave in Q2, reflecting David Tepper's continued AI focus. SpaceX generated Q2 revenue of $7.8 billion, up 92% year over year, but remains loss-making and trades at a steep 69.1x sales multiple despite a $222.32 average target implying 50% upside from roughly $148. CoreWeave's Q2 revenue rose 112.5% to $2.6 billion and its backlog reached $104 billion, with more than $25 billion of additional Q3 contracts; its 5.8x sales valuation and $144.46 average target, implying 62% upside, appear more attractive despite widening losses.

Analysis

The relevant distinction is not headline growth but capital efficiency. CRWV’s contracted-demand narrative supports near-term utilization, yet the equity remains a leveraged residual claim on GPU economics: financing costs, accelerated hardware obsolescence, customer concentration, and renewal pricing will determine whether backlog converts to free cash flow. A modest decline in realized GPU pricing or utilization after initial contract periods could materially impair equity value despite continued reported revenue growth; conversely, sustained scarcity through 2027 would produce rapid operating leverage once capacity additions slow.

SPCX should trade as a long-duration, execution-sensitive platform asset rather than a conventional AI beneficiary. Its premium multiple leaves the shares exposed to any delay in monetizing capital-intensive projects, while the likely benefit accrues first to component and launch-supply vendors with booked volume rather than to the platform’s current earnings base. In a higher-real-yield or AI-multiple de-rating regime, SPCX has substantially greater duration risk than cash-generative AI infrastructure beneficiaries such as TSM, NVDA, and potentially AMZN.

The non-consensus risk is that AI infrastructure demand may remain robust while returns on incremental capacity deteriorate. Hyperscalers can internalize workloads, negotiate lower rates, or use alternative suppliers once supply loosens; CRWV’s backlog should therefore be evaluated for cancellation rights, customer concentration, contract duration, and pass-through provisions rather than treated as revenue-equivalent. Near-term momentum favors CRWV, but the 6-18 month trade pivots on capex intensity and net-debt-to-EBITDA trajectory, not bookings growth alone.

Before acting, validate the article’s security identifiers, listing status, reported financials, and short availability; the claims contain unusual company-characterization elements and should not be treated as independently verified fundamentals. This is a catalyst-driven relative-value opportunity only after primary filings and contract disclosures confirm the underlying data.

Key Decisions for Investors

• Watch for a long CRWV / short SPCX pair over the next 1-3 months, sized beta-neutral, only after confirming both securities’ tradability and borrow. Thesis: CRWV has nearer-term utilization and revenue conversion catalysts, while SPCX carries greater long-duration multiple risk. Target 15-25% relative outperformance; exit if CRWV’s utilization, contracted capacity, or gross-margin outlook weakens.
• Do not chase CRWV solely on backlog. Establish an earnings alert around capex guidance, interest expense, free-cash-flow timing, customer concentration, and any change in cancellation provisions; a rising funding requirement or delayed FCF breakeven would be a short/put trigger rather than a long entry.
• For AI exposure over a 6-18 month horizon, retain preference for TSM and NVDA over speculative capacity lessors when real yields rise or AI multiples compress. These names have more diversified demand and less direct exposure to GPU-rental pricing; reassess if hyperscaler capex guidance rolls over.
• Avoid directional SPCX exposure until launch cadence, regulatory milestones, and segment-level unit economics are independently disclosed. A failure to deliver a credible path to positive free cash flow, or a 10-15% AI-growth guidance reset, would likely matter more to valuation than incremental revenue growth.