Billionaire David Tepper Sold Micron and Sandisk, and Is Hedging Against 1 of Their Largest Customers

David Tepper’s Appaloosa Management booked a strong 32% gross return in the first half of 2026 but trimmed Micron by 41% last quarter and fully exited Sandisk. Tepper also added downside exposure via put options on Apple—covering the right to sell 835,000 Apple shares worth about $242M (just over 3% of the portfolio)—amid CEO Tim Cook’s warning that higher memory prices will pressure Apple’s gross margin. Net-net, the 13F suggests Tepper is taking profits on memory/cycle winners while hedging Apple’s margin risk from AI-driven memory pricing.

Analysis

The useful signal here is not that a single manager turned cautious; it is that the marginal winner in memory is now a crowded consensus trade, while the margin beta has quietly shifted to the customer. If pricing stays tight into the next earnings window, MU/SNDK can still look operationally strong, but the stock reaction is increasingly vulnerable to peak-cycle multiple compression rather than profit misses. That leaves the memory equipment complex (LRCX, AMAT, KLAC) exposed one step later if customers start deferring capex after squeezing through the current supply squeeze.

For AAPL, the risk is less absolute downside and more a re-rating fade: a business with slower top-line growth cannot sustainably absorb rising input costs and still trade like a compounder. The immediate catalyst is the next margin guide; over 1-3 months, any evidence that memory inflation is more than a one-off cost pass-through would hit gross margin expectations and compress the premium multiple. Still, the cash-flow profile makes outright collapse unlikely unless unit demand or China mix deteriorates at the same time.

Contrarian view: this may be a stale and partly hedged 13F read, not a clean directional call. The filing lags the market by weeks, and puts can be a hedge against other long exposure or a way to cap downside after a big run. The market may be overreacting to a respected investor de-risking into strength, but underreacting to the possibility that the memory cycle is closer to its pricing peak than reported earnings imply.

Key Decisions for Investors

• Trim MU and SNDK into strength; if you want downside exposure, use 1-3 month put spreads on MU or SOXX ahead of the next earnings/spot-price read. Best risk/reward is a defined-risk hedge; invalidated by continued ASP expansion or upside guidance.
• Do not short AAPL outright on this signal; if you want to express margin risk, buy a small put spread into the next earnings date. The trade works only if gross margin guidance softens; otherwise time decay will punish a naked bearish position.
• Watch LRCX, AMAT, and KLAC as second-order shorts if memory pricing stays elevated but customer capex starts to roll over. This is a delayed-cycle trade, not a same-day reaction trade, and it depends on visible order delays or guide-downs.
• Use AAPL gross margin and MU commentary as the falsifiers: if Apple holds margin guide and MU confirms no inventory buildup, cover any bearish exposure quickly. That combination would argue the cycle is still tightening rather than peaking.