NextFin News - The fourth quarter of 2025 marked a decisive pivot in the artificial intelligence trade as billionaire hedge fund managers began trimming their exposure to Nvidia in favor of Micron Technology. According to 13F filings released this month, David Tepper’s Appaloosa Management and Michael Platt’s BlueCrest Capital were among the high-profile sellers of Nvidia, the chipmaker that has defined the AI era. While Nvidia remains a cornerstone of the modern tech economy, the shift suggests that the "smart money" is moving from the designers of AI chips to the providers of the high-bandwidth memory essential for those chips to function.
Tepper’s Appaloosa Management executed one of the most significant maneuvers, purchasing exactly one million shares of Micron while simultaneously adding call options on another 250,000 shares. This aggressive positioning in Micron came as Tepper reduced his stake in Nvidia, signaling a belief that the valuation gap between the two semiconductor giants has become too wide to ignore. Micron, which has seen its stock climb nearly 50% in the first ten weeks of 2026, is benefiting from a supply-demand imbalance in High Bandwidth Memory (HBM3E), a critical component for Nvidia’s latest Blackwell architecture.
The exodus from Nvidia was not limited to Tepper. Israel Englander’s Millennium Management offloaded over 3 million shares of the AI superstar during the final three months of 2025, while Chase Coleman’s Tiger Global Management reduced its position by 698,000 shares. These sales do not necessarily reflect a bearish view on AI itself, but rather a tactical rotation. As Nvidia’s market capitalization hovered near record highs, fund managers sought "catch-up" plays in the semiconductor supply chain where price-to-earnings multiples remained more grounded.
Micron’s appeal lies in its dominance of the memory "Big Three" alongside Samsung and SK Hynix. Unlike the logic-chip market where Nvidia faces looming competition from internal silicon projects at Amazon and Google, the memory market is a disciplined oligopoly. The transition to AI-heavy workloads requires significantly more DRAM per server, a structural tailwind that has allowed Micron to command higher margins. Platt’s BlueCrest Capital followed a similar logic, rotating capital out of the high-flying Nvidia to capture the cyclical upswing in memory pricing that began late last year.
Stanley Druckenmiller of Duquesne Family Office also reduced his overall technology allocation to a multi-year low during the same period. While Druckenmiller has been a vocal proponent of the AI revolution, his Q4 filings reveal a shift toward international equities and value-oriented sectors. This broader de-risking by one of the world’s most successful macro traders suggests that the easy gains in the "Magnificent Seven" may be over, forcing investors to look deeper into the hardware stack for alpha.
The divergence in performance between the two stocks in early 2026 validates these Q4 moves. While Nvidia has faced increased volatility as U.S. President Trump’s administration weighs new export restrictions on advanced AI hardware, Micron’s essential role in the global memory supply chain has provided a sturdier floor for its share price. The billionaire class is betting that while Nvidia provides the brains of AI, Micron provides the necessary capacity for those brains to think, and at a much more attractive entry price.
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