Financial data acts as a continuous driving force for Wall Street’s bustling activity, and investors rarely lack information for analysis. In essence, there is such an abundance of data, from earning reports to frequent economic updates, that significant pieces of information might occasionally go unnoticed or overlooked.
By the close of no more than 45 days after a fiscal quarter concludes, institutional investors managing over $100 million in assets are obligated to submit Form 13F to the Securities and Exchange Commission. This submission, originally due on May 15 for the March quarter, offers insight into which stocks major fund managers have recently purchased or sold during that particular quarter.
Instead of solely focusing on Warren Buffett’s 13F filings as Wall Street’s top money manager, it’s important to also consider the astute observations and exceptional returns of other billionaires like David Tepper, who leads Asset Management firm Apaloosa. Investors would be wise to take note of him as well.
In March, Tepper, a devoted investor in large-cap growth stocks, managed over $8 billion in assets under management (AUM) distributed among 38 investments (stocks and options). Over the past year (ending March 31, 2025), Tepper has added 13 new positions to his portfolio while selling off 14 previous holdings.
Out of all these deals, the one that really stands out could be Tepper’s full withdrawal from Advanced Micro Devices (AMD), a company well-known in the artificial intelligence sector, and his bold investment in two top-tier companies whose markets are projected to expand exponentially – up to ten times – within the next eight years.
Billionaire David Tepper bids adieu to AMD
In simple terms, starting in 2025, the stock market was found to be one of its most expensive valuations when compared to data going back to 1871, using the Shiller price-to-earnings ratio. As a result, the billionaire investor at Appaloosa didn’t hesitate to cash out some of his fund’s investments. From April 1, 2024, to March 31, 2025, he authorized the selling of 1,630,000 shares of Advanced Micro Devices (AMD).
Even though Nvidia dominates the market for GPUs used in AI-accelerated business data centers, it’s thought that AMD could potentially make inroads into this lead. This is because AMD’s Instinct series of chips designed for AI acceleration are more affordable than those from Nvidia, and AMD seems to be following a similar innovation path as the AI industry’s favorite stock on Wall Street. Essentially, AMD’s chips are expected to appeal strongly to budget-conscious businesses and companies that prefer not to wait for AI-focused data center hardware.
Given that Advanced Micro Devices appears well-positioned to capitalize on the AI revolution, the intriguing query arises: What factors led David Tepper to liquidate his fund’s entire holding?
One feasible response could be “Tepper seized the chance to cash in on his profits,” indicating that Tepper held AMD shares for approximately two years, having entered the position during the second quarter of 2023. The stock price increased significantly from below $100 per share to between $100 and $200 per share over the past 20 months, providing an excellent chance for Tepper to realize his profits.
But there may be more to this selling than meets the eye.
In simpler terms, analysts and investors on Wall Street have been rather unimpressed with AMD’s growth compared to other companies specializing in AI hardware. Despite showing improvement in the first quarter of 2025, their 50% gross margin is considered lackluster. This underwhelming performance might be due to AMD’s ROCm software, which doesn’t seem to stand out as much as Nvidia’s CUDA platform, a key factor that has kept its clients within its own AI community.
Another potential worry Tepper might have about AMD could stem from the increasing possibility of an AI market bubble that may eventually burst. Over the past three decades, investors have frequently overvalued the early adoption rates and practical applications of groundbreaking technologies, with AI appearing to be the next technology that could suffer this same fate. Even though Advanced Micro Devices is not solely an AI stock, a sudden collapse in the AI market could significantly impact AMD.
Appaloosa’s billionaire investor piled into two companies on the cutting-edge of a hot growth trend
From my perspective, what truly catches the eye is the bold move made by billionaire David Tepper at the other end of the spectrum – his escalation of two existing investments, as of the close of March 2024.
Between April 1, 2024, and March 31, 2025, the billionaire head of Appaloosa acquired a total of 1,840,000 shares of Uber Technologies (UBER) and 8,532,382 shares of Lyft (LYFT). This significant investment boosted Tepper’s holdings by 135% in Uber and an impressive 1,825% in Lyft.
The main idea presented is that the most astute investor associated with Appaloosa isn’t trying to identify a clear winner between Uber and Lyft in the ride-sharing sector. Instead, he’s positioning his fund to exploit a trend anticipated to increase dramatically over the next eight years. According to Stratis Research predictions, the worldwide market for ride-sharing could expand more than ten times, from $87.7 billion in 2025 to an impressive $918.2 billion by 2033. This projected growth rate of 21% per year presents a substantial chance for both companies to flourish.
A key point to note is that Uber Technologies and Lyft have managed to consistently generate profits, marking a significant milestone for both firms. While Uber has faced some challenges during its expansion phase, CEO Dara Khosrowshahi has steered the company expertly since his appointment in 2017. Similarly, David Risher has made strategic adjustments at Lyft, notably improving its cash flow efficiency, following his appointment in April 2023. Both companies show promising signs of continuous high growth in the double digits.
One interesting aspect about Uber and Lyft is their success in exploring income sources beyond ride-hailing. To be more precise, they are seizing advertising possibilities connected with their ride-service platforms as a means to increase revenue and enhance their financial liquidity. The unpredictable nature of the economic cycle often favors businesses that rely on advertisements.
Additionally, it’s important to note that Uber has a greater reach compared to Lyft in the ride-sharing market. Not only does Uber control approximately three times the market share of Lyft, but it also extends its business into food delivery and logistics services. This diversification allows Uber to capitalize on extended periods of economic expansion.
It could be said that Tepper’s strategy may face one criticism: Lyft, which is Appaloosa’s smaller investment among the two, appears to offer a better value proposition. While Uber’s high price-to-sales (P/S) ratio of 4 might indicate its strong position in the ride-sharing market, it’s important to consider: Is that commanding valuation four times greater than Lyft’s P/S ratio, given both companies’ comparable growth rates, justified? I would contend it is not.
If the global ride-sharing market expands by 21% each year for the next eight years, it’s highly probable that both stocks will succeed, as long as they manage to preserve or boost their current market positions.
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2025-07-22 10:20