David Tepper of Appaloosa Management, a figure who navigates the stock market like a man drafting petitions to a distant and indifferent bureaucracy, has long practiced a strategy of paradoxical clarity: diversifying into technology stocks while clinging to undervalued cyclical sectors as if they were the last remaining filing cabinets in a collapsing archive. His decisions, though precise, are executed with the urgency of a clerk stamping forms in a storm, indifferent to the chaos beyond the window.
In the second quarter of 2025, he liquidated stakes in Broadcom (AVGO) and Meta Platforms (META), appending 755,000 shares of Taiwan Semiconductor Manufacturing (TSM) to his portfolio-a 279.6% increase. The transaction reads less like a trade and more like a bureaucratic appeal: a desperate attempt to align with a system that demands both obedience and absurdity.
This maneuver does not signify abandonment of the artificial intelligence (AI) market, but rather a deeper immersion into its administrative heart. TSMC, that bureaucratic titan in the silicon cathedral of artificial intelligence, fabricates the world’s most advanced chips for Nvidia, Advanced Micro Devices, Apple, Alphabet, and Meta Platforms. To exist without its foundries is to be denied entry to the AI pantheon-a fate worse than obsolescence.
Tepper, ever the pragmatist in a world of paradoxes, has correctly identified that chip supply is the linchpin of this absurd hierarchy, granting TSMC a pricing power as immutable as the red tape of a forgotten ministry. The long-term profitability of this investment, he seems to suggest, is not a question of arithmetic but of survival.
The Liquidation of Certainties: Broadcom and Meta
Broadcom and Meta Platforms, though paragons of quality, have been discarded by Tepper like expired permits in a city that rewrites its rules nightly. Broadcom’s portfolio-custom AI chips, networking hardware, enterprise software-positions it as a cornerstone of global AI infrastructure. Analysts predict 21% year-over-year revenue growth to $15.8 billion and 33.9% non-GAAP earnings per share to $1.66 in Q3 2025. Yet Appaloosa’s complete divestment suggests a recognition that even the most formidable enterprises are subject to the caprices of supply chains governed by unseen decrees.
Meta Platforms, that digital colossus with 3.4 billion daily users and $47.5 billion in quarterly revenue, remains shackled to the cyclical whims of advertising-a business as fickle as a bureaucrat’s mood. Its heavy capital expenditures, Tepper implies, are less strategic investments than mandatory tributes to a system that demands sacrifice without promise of reward. The 27% reduction in his Meta stake is not a critique of the company but a surrender to the inevitability of fiscal arithmetic.
The TSMC Paradox: A Foundry of Certainties
Tepper’s pivot to TSMC is an act of faith in a world where faith is a liability. The foundry’s Q2 2025 revenue surged 54% to $30.1 billion, with operating margins tightening to 49.6%. Management now forecasts 30% revenue growth in 2025, driven by high-performance computing chips (59% of sales), smartphones (27%), and the enigmatic realms of automotive and IoT (5% each). Advanced nodes (7nm and below) account for 74% of wafer revenue-a figure that reads less like a business metric than a bureaucratic decree.
The supply of 3nm and 5nm chips, according to TSMC’s labyrinthine logic, is “tight” compared to the “explosive demand” of the AI market. The company’s giga fab clusters-where tools and infrastructure are shared like communal typewriters in a dystopian office-allow for the conversion of older nodes to newer ones. This is not innovation but a bureaucratic ritual, a dance with obsolescence performed under the watchful eye of market forces.
TSMC’s CoWoS packaging technology, meanwhile, is in such dire shortage that the company admits to focusing only on “narrowing the gap” rather than balancing supply and demand. This is the essence of Kafkaesque pricing power: a system where scarcity is not a flaw but a feature, and profitability is a byproduct of inaction.
The company’s roadmap-2nm chips in H2 2025, N2P and A16 in 2026, A14 by 2028-is a bureaucratic manifesto. Each advancement is less a technological leap than a compliance with an unseen mandate, a step in a process that no one understands but all must follow. At a forward P/E of 23.8, TSMC trades at a discount to the technology sector’s median of 31.5, a price that seems almost charitable in a market where logic is a luxury.
For the retail investor, Tepper’s move is both a signal and a riddle. To follow it is to submit to the absurdity of a system where certainty is a myth, and survival is a bureaucratic formality. Yet in this labyrinth, TSMC stands as both warden and keymaster-a paradox as inescapable as it is profitable. 🌀
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2025-09-05 15:17