David Tepper’s AI Chessboard: Buy Three, Sell Three

There is a peculiar thrill in watching the financial world’s equivalent of a treasure map get redrawn. August 14 marked the deadline for Wall Street’s institutional investors to file their Form 13F reports with the SEC-a sort of quarterly diary entry from the market’s most storied money managers. If you’ve ever wondered what the titans of finance bought, sold, or simply stared at during the second quarter, this is your invitation to peek over their shoulders.

Warren Buffett may be the most famous name in the asset management game, but he’s hardly the only one with a knack for finding gold in the stock market’s rocky terrain. David Tepper, the billionaire helmsman of Appaloosa Management, is a master of the craft, and his latest moves are as revealing as they are instructive. Like a seasoned sailor navigating uncharted waters, Tepper has charted a course through the AI-driven storm, buying up three of the most hyped trillion-dollar stocks while unloading three others.

Tepper’s portfolio reads like a love letter to artificial intelligence. Most of the industry’s luminaries-those companies whose names you’ve heard whispered in boardrooms and tech conferences-have found a home in Appaloosa’s $6.4 billion fund. But this isn’t just a passing fancy. It’s a calculated bet on the future, with all the risks and rewards that entails.

During the June-ended quarter, Tepper added to three AI darlings, including one he had been steadily selling for two years. On the flip side, he trimmed or ditched three other industry giants. The contrast is as stark as it is telling.

A shopping spree with Nvidia on the list

Tepper’s shopping cart was notably full in the second quarter. He added eight new stocks and bolstered nine existing ones. Three additions stand out like a lighthouse in fog:

Nvidia (NVDA): 1,450,000 shares purchased (483% increase)
Taiwan Semiconductor Manufacturing (TSM): 755,000 shares purchased (280% increase)
Amazon (AMZN): 190,000 shares purchased (8% increase)

The Nvidia purchase is particularly intriguing. Just two years ago, Tepper was a persistent seller of this very stock, reducing his stake by 97%. Now, he’s doubling down. What changed? A brief but brutal market tremor in early April, triggered by President Trump’s tariff announcements, offered Tepper the chance to buy high-growth tech stocks at what he presumably saw as a discount. It was the financial equivalent of a Black Friday sale for the super-rich.

Tepper’s rationale? These three companies aren’t just riding the AI wave-they’re building the boat. Nvidia’s GPUs are the engines powering AI data centers, and with its Blackwell Ultra and upcoming Vera Rubin chips, the company is in a league of its own. TSMC, the world’s leading chipmaker, is expanding its production like a baker who’s just discovered a new recipe for demand. And Amazon’s AWS, with its 32% cloud market share, is the digital infrastructure behind much of the AI revolution.

Of course, all this glitz comes with a caveat. History suggests that AI could eventually become a bubble, and bubbles-well, they pop. But even in such a scenario, companies like Nvidia, TSMC, and Amazon have enough diversified revenue streams to weather the storm better than most. It’s like building a house on a hill with a moat and a few spare lifeboats.

Saying goodbye to Broadcom and friends

If Tepper was a buyer in some corners of the AI world, he was a seller in others. The June quarter saw Appaloosa offloading three prominent names:

Broadcom (AVGO): 130,000 shares sold (entire position)
Meta Platforms (META): 150,000 shares sold (27% reduction)
Alphabet (GOOGL) (GOOG): 510,000 Class C shares sold (25% reduction)

Meta and Alphabet weren’t surprises-Tepper had been steadily trimming these for over a year. Broadcom, however, feels like a sudden U-turn. The company had been in Appaloosa’s portfolio for just a quarter before being shown the door. Why? Profit-taking, likely. Tepper isn’t one to hold onto a winning hand forever; he’s more of a gardener, pruning to let the remaining plants grow.

The broader question, though, is whether Tepper’s selling spree is a sign of caution in an overvalued market. The S&P 500’s Shiller P/E ratio recently hit 39.58-the third-highest level in 154 years of data. History tells us that when the market gets this frothy, corrections are inevitable. If the bubble bursts, even the most robust AI stocks could take a hit. But then again, no stock is immune to the occasional market tantrum.

Meta and Alphabet, at 23 and 25 times forward earnings, still look reasonably priced for their growth rates. Broadcom, however, is edging closer to a 40 times multiple, which feels like buying a house in a hurricane zone. One might wonder if Tepper is playing a game of Jenga with the market, carefully removing pieces to see where the cracks might form.

In the end, Tepper’s moves are a masterclass in balance-leveraging AI’s momentum while hedging against its risks. It’s a reminder that even the savviest investors can’t predict the future, but they can certainly prepare for it. And if history has taught us anything, it’s that the best investors are those who know when to dance and when to sit it out.

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2025-09-17 10:18

A shopping spree with Nvidia on the list

Saying goodbye to Broadcom and friends

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