Billionaire David Tepper’s Appaloosa Makes Bold $3 Trillion AI Stock Moves: Buying These 3, Dumping 3 Others

Wall Street's whale just placed his biggest AI bet yet.

David Tepper's Appaloosa Management is shaking up its portfolio with massive trillion-dollar artificial intelligence plays—loading up on three sector leaders while cutting three former favorites loose.

The Buying Spree

Tepper's adding serious firepower to positions that already dominate the AI infrastructure race. These aren't speculative picks—they're the engines powering the entire revolution.

The Exit Strategy

Meanwhile, three former darlings get the axe. Performance issues? Valuation concerns? Or just classic Tepper tactical repositioning?

Because nothing says 'conviction' like dumping three trillion-dollar companies in one quarter—unless it's the classic hedge fund move of chasing momentum while pretending it's genius-level analysis.

Image source: Getty Images.

Tepper also tends to be pretty active on the investment front. During the June-ended quarter, he added to three trillion-dollar AI stocks, including a company he'd been a persistent seller of for two years. On the other side of the coin, he reduced or jettisoned three other industry-leading AI stocks.

Billionaire David Tepper goes shopping, with Nvidia high on the buy list

During the second quarter, Tepper green-lit the purchase of eight new stocks, as well as added to nine existing holdings. Three of these existing adds are what really stand out:

• Nvidia (NVDA -1.55%): 1,450,000 shares purchased (483% increase)
• Taiwan Semiconductor Manufacturing (TSM 0.65%): 755,000 shares purchased (280% increase)
• Amazon (AMZN 1.23%): 190,000 shares purchased (8% increase)

The Nvidia add is particularly noteworthy as Tepper had reduced Appaloosa's stake in the company by 97% over the course of two years.

The biggest catalyst that likely incentivized buying activity in this trio of trillion-dollar AI stocks is the short-lived market crash in early April, spurred by President Donald Trump's unveiling of his tariff and trade policy. Though the steep selling activity lasted less than a week, with TRUMP pausing higher "reciprocal tariffs" for 90 days via an announcement on April 9, it offered opportunistic investors like David Tepper a chance to grab high-growth tech stocks at a perceived discount.

Furthermore, Tepper likely recognizes that all three of these AI companies bring sustainable competitive advantages to the table:

• Nvidia's graphics processing units (GPUs) are the undisputed top choice by businesses operating AI-accelerated data centers. Nvidia is ramping up production of Blackwell Ultra and, under the leadership of CEO Jensen Huang, anticipates debuting its Vera Rubin and Vera Rubin Ultra GPUs in the latter halves of 2026 and 2027, respectively. No external competitors are remotely close to matching the compute capabilities of Nvidia's AI hardware.
• Taiwan Semiconductor Manufacturing, which is best-known as "TSMC," is the world's leading chip fabrication company. It's expanding its chip-on-wafer-on-substrate capacity at a breakneck pace, which should help Nvidia and its rivals better meet enterprise demand for AI-GPUs. TSMC shouldn't have any issue growing its backlog for advanced chip production.
• On the application side, Amazon Web Services (AWS) is the world's leading cloud infrastructure services provider, with a 32% share of spend during the second quarter, based on estimates from Canalys. AWS is integrating generative AI solutions and large language model capabilities onto its platform to help Amazon's clients build out their business.

Though historical precedent suggests an AI bubble will eventually form and burst, which would represent big-time trouble for Nvidia, TSMC and Amazon have sufficiently diversified revenue streams and would likely navigate an AI bubble-bursting event better than the world's largest publicly traded company.

Image source: Getty Images.

Appaloosa's billionaire boss bid adieu to Broadcom and reduced two more trillion-dollar AI stocks

On the other hand, Appaloosa's billionaire investor was a decisive seller of three other AI stocks during the June-ended quarter:

• Broadcom (AVGO -1.06%): 130,000 shares sold (entire position)
• Meta Platforms (META 1.93%): 150,000 shares sold (27% reduction)
• Alphabet (GOOGL -0.13%) (GOOG -0.09%): 510,000 Class C (GOOG) shares sold, (25% reduction)

For two of these three trillion-dollar AI stocks, Tepper being a seller shouldn't come as a surprise. Since the end of September 2023, Appaloosa has sold 1.55 million shares of Meta (a 79% reduction) and 1.25 million Class C shares of Alphabet (a 45% reduction). Broadcom is a bit of an outlier, with the 130,000 shares purchased in the first quarter being shown the door just a few months later.

The most logical of all catalysts for this selling activity is simple profit-taking. Although the average hold time for a stock in Tepper's fund is a little over 29 months, he frequently adds and reduces existing holdings, as evidenced by the trading activity noted in these trillion-dollar stocks.

Appaloosa has been a continuous shareholder in Alphabet's Class C shares and Meta Platforms since the second quarter of 2014 and the first quarter of 2016, respectively. There's nothing wrong with cashing in some of these chips.

The broader concern is whether this selling activity has anything to do with the stock market rocketing to its third-priciest valuation multiple when back-tested over 154 years.

Last week, the's Shiller price-to-earnings (P/E) Ratio, also known as the cyclically adjusted P/E Ratio, or CAPE Ratio, hit a multiple of 39.58, which is the third-priciest reading during a continuous bull market dating back to January 1871. The five prior occurrences where the S&P 500's Shiller P/E topped and sustained 30 for a period of at least two months were eventually (keyword!) followed by 20% or greater declines in the benchmark index.

If the stock market does enter a correction or bear market, premium growth stocks like Broadcom, Meta Platforms, and Alphabet WOULD be expected to take it on the chin. Then again, Nvidia, TSMC, and Amazon would take their lumps, too.

Among this trio, Alphabet and Meta remain attractive on a valuation basis. Alphabet and Meta can be purchased, as of this writing, following the closing bell on Sept. 12, for approximately 23 and 25 times forward-year earnings, respectively. The double-digit growth rates for both companies support these multiples.

But with Broadcom pushing closer to a forward P/E of 40, its short-term risk-versus-reward profile has swung decisively negative.