David Tepper made a huge bet on U.S. stocks in the second quarter.
The eclectic investor’s Appaloosa Management reported nearly $5.4 billion in long positions of U.S. common stocks at the end of June, nearly three times the roughly $1.9 billion it held in the previous quarter, according to its most recent 13F filings.
Appaloosa used the substantial additional capital to establish 19 new positions, accounting for nearly half of the 39 individual stocks held by the firm at the end of the second quarter. It also aggressively boosted the size of its largest positions, many of which are the tech, internet, and consumer stocks that have led the overall market this year.
For example, Appaloosa joined the Nvidia party when it boosted its stake in the high-flying chip giant by nearly 600 percent. According to the latest quarterly filing, this move made the company the firm’s largest long, representing 8 percent of Appaloosa’s U.S. long stock portfolio. It also turned out to be a great move — Nvidia’s shares tripled in the first half of the year.
Appaloosa also more than doubled its stake in Facebook parent Meta Platforms, now its second-largest long, and it also boosted its position in cloud giant Microsoft by more than five times, making it the firm’s third-largest long.
As a result, Amazon — Appaloosa’s second-largest long at the end of March — dropped to fourth place, after the firm “only” increased its position by nearly 60 percent. Similarly, Google parent Alphabet, which was Appaloosa’s largest long at the end of the first quarter, dropped to seventh place, after the firm only slightly boosted its stake in the second period.
Meanwhile, Chinese e-commerce giant Alibaba Group Holding became Appaloosa’s fifth-largest long, after the firm turned a small, 100,000-share position into a 4.475-million-share stake worth over $370 million.
Appaloosa also made a large number of new investments in the second quarter, five of which immediately ranked among its 12 largest long positions. Four of those five are semiconductor stocks: Advanced Micro Devices (eighth), Intel (ninth), Qualcomm (10th) and Taiwan Semiconductor Manufacturing (11th).
Altogether, five of Appaloosa’s 11 largest longs are chip stocks, accounting for nearly a quarter of the firm’s U.S. common stock long assets. This doesn’t include Marvell Technology, another chip company that Appaloosa initiated in the second quarter and that now ranks as the firm’s 15th-largest long.
Many of these top holdings are also direct or indirect plays on artificial intelligence (AI). Tepper’s big move into tech, semiconductors, and other AI plays caused shares of ride app Uber Technologies to drop to sixth place, even though Appaloosa had also boosted that stake. The company had become the firm’s third-largest long at the end of the first quarter, after Appaloosa increased its stake by nearly five times.
In general, Appaloosa was mostly a buyer in the second quarter. Interestingly, it only reduced its stake in three stocks and fully exited one stock—a small position in Aptiv, an Irish automotive technology supplier.
