The investor said Thursday on CNBC's "Halftime Report" that he's still "very, very long" the chipmaker's shares.
"The demand side is going to be good for a long time. Servers, cloud and if you have smart cars. I mean there is just a great future for this stuff [memory chips]," Tepper said. "There's a lot of emotion among [traders in] this stock."
Micron shares rose after the hedge fund manager's comment. The stock closed up 4.5 percent Thursday.
Tepper cited the company's attractive low valuation, new management team and stock buyback plans as reasons to own Micron shares.
The company's stock is under pressure this month due to heightened concerns about slowing memory chip demand. Micron shares are down 20.5 percent month to date through Wednesday.
Last week Morgan Stanley and an executive at KLA-Tencor said the memory chip market is deteriorating versus expectations, which drove a big drop in the semiconductor sector's shares.
From inception in 1993, Tepper's hedge fund generated gross annual returns of more than 30 percent, according to a source familiar with the firm's returns. Appaloosa Management has approximately $14 billion of assets under management.
The billionaire investor is also the owner of the Carolina Panthers of the National Football League.