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

Prosper Junior Bakiny, The Motley Fool Tue, September 8, 2026 at 9:50 PM GMT+9 6 min read SPCX -1.20% CRWV +5.68% GOOG -1.11% NVDA +0.84% AMZN -0.15% Billionaire David Tepper, the founder and president of the hedge fund Appaloosa Management, is particularly bullish on technology and artificial intelligence (AI) stocks. The firm's portfolio features several industry leaders, including Amazon (NASDAQ:AMZN), Micron Technology (NASDAQ:MU), Taiwan Semiconductor Manufacturing (NYSE:TSM), and Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), with these four accounting for roughly 50% of the portfolio. David Tepper and his team are doubling down on AI.

During the second quarter, Appaloosa Management added Space Exploration Technologies (NASDAQ:SPCX) and CoreWeave (NASDAQ:CRWV) to the portfolio. Tepper and his team aren't the only ones who are optimistic about these companies' prospects. Average price targets from Wall Street imply that SpaceX and CoreWeave could both rise meaningfully over the next 12 months. Are these stocks worth buying now?

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SpaceX set the record for the largest IPO ever in June. The stock has been volatile since then, rising to as much as $225.64 and falling as low as $104.83. As of writing, shares are changing hands for about $148 apiece, slightly down from its $150 opening price. Wall Street thinks there is far more upside ahead, though. The company's average price target is $222.32, according to Yahoo! Finance. That implies a 50% upside from current levels. On the one hand, SpaceX's business looks strong.

Revenue grew rapidly -- by 92% year over year to $7.8 billion -- during the second quarter. The company remains unprofitable, but its net loss per share almost halved in the period, going from $1 billion to $541 million. What's more, analysts expect revenue growth to remain healthy and for the company to turn profitable soon, even as it continues to invest large sums in its AI-related ambitions.

And it's worth noting that AI revenue grew much faster than the company average during the second period. That's before we even consider that SpaceX is also making progress in its space segment, with Starship test flights going well, and that its Starlink satellite connectivity business could expand into a major global carrier. Everything seems to be going great for SpaceX. Except that the stock looks expensive, trading at a price-to-sales ratio of 69.1.

Meanwhile, there is substantial uncertainty ahead. Starship may take time to reach the kind of launch cadence SpaceX needs it to for some of its space-related ambitions, competitors could catch up, the Starlink business could hit regulatory (or other) delays, and there is also the risk that its AI investments may not pay off nearly as much as it hopes. There is a wide range of possible outcomes for the stock, and the current valuation assumes a somewhat aggressive positive outcome, leaving little room for error.

Those who stay on the sidelines right now may well miss out on amazing returns, but investing in stocks with little margin for error isn't a sustainable strategy.

CoreWeave specializes in renting out AI computing capacity. The company's latest results were solid. In the second quarter, CoreWeave's revenue jumped 112.5% year over year to $2.6 billion. The company's operating loss was $49 million, compared to an operating income of $19 million reported in the year-ago period. And on the bottom line, CoreWeave's loss per share widened to $1.14, compared with $0.60 in the year-ago quarter.

CoreWeave's margins and profits have worsened as it invests heavily to continue its AI build-out. Investing in the stock right now comes down partly to figuring out whether it can recoup that investment (and then some) over the medium term. The great news is that there are clear signs that its tailwind won't end anytime soon.

Consider that at the end of the second quarter, CoreWeave had a revenue backlog of $104 billion, which grew 245.5% year over year. It's also substantially higher than the company's $7.59 billion trailing-12-month revenue. And the $104 billion didn't even include the more than $25 billion in revenue backlog CoreWeave has already contracted during the third quarter.

Further, the company's capacity is sold out in the near-term, which justifies additional investments in the business. All of that suggests that CoreWeave's revenue should maintain a solid northbound trajectory over the next few years, at the very least. At the same time, CoreWeave's shares don't look prohibitively expensive.

A price-to-sales ratio of 5.8 seems fair for a company growing its revenue as fast as CoreWeave is. Wall Street's current average price target for the stock is $144.46, which implies a 62% upside from current levels. CoreWeave may not perform quite that well over the next year, but Wall Street's optimism about its prospects seems justified.

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Prosper Junior Bakiny has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Micron Technology, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

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