While much of Wall Street has been captivated by Nvidia’s meteoric rise in the artificial intelligence (AI) boom, billionaire investor David Tepper of Appaloosa Management has revealed a far more substantial bet: Chinese e-commerce and cloud giant Alibaba Group Holding. This deep dive uncovers Tepper’s strategic rationale, his nuanced approach to other AI stalwarts like Nvidia and Intel, and what these moves signal for long-term investors navigating the dynamic AI landscape.
In the high-stakes world of institutional investing, few names command as much attention as David Tepper. The founder of Appaloosa Management, known for his deep-value investing philosophy and uncanny market timing, has once again raised eyebrows with his latest portfolio disclosures. While many might assume his largest AI-driven position would be the seemingly unstoppable Nvidia, recent filings reveal a surprising leader: Alibaba Group Holding.
Tepper’s investment decisions are meticulously scrutinized by the financial community. Institutional investors managing over $100 million are required to file a Form 13F with the Securities and Exchange Commission (SEC) no later than 45 calendar days after the end of a quarter, offering a vital snapshot into the strategies of Wall Street’s most prominent money managers. Tepper’s filings have consistently shown his adaptability, from making a fortune by shorting the market during the 1987 crash to posting annualized returns of 28% for investors before fees, as reported by Bloomberg.
Alibaba: Tepper’s Unexpected AI Anchor
As of his most recent disclosures, Alibaba Group Holding (NYSE: BABA) stands as Tepper’s largest holding and his most significant AI bet, comprising 12.4% of his total portfolio and valued at an impressive $801.5 million as of June 30, 2025. This commanding position comes despite Tepper trimming his stake by approximately 23% in the second quarter of 2025, likely a strategic move to capitalize on the stock’s more than doubling in value earlier that year.
Tepper’s conviction in Alibaba stems from a confluence of factors, articulated in a September 2024 CNBC interview where he expressed his intent to “buy everything” in China following a massive economic stimulus announced by the Chinese government. He highlighted the attractive valuations and robust growth prospects that Chinese stocks offered. Alibaba, with its vast e-commerce ecosystem and rapidly expanding cloud services, perfectly fit this criteria.
While Alibaba’s reported 2% year-over-year revenue growth for the quarter ending June 30, 2025, might seem modest, its AI-related product revenue has consistently delivered triple-digit percentage growth for eight consecutive quarters. Furthermore, its Cloud Intelligence Group saw a 26% revenue jump year over year in the latest quarter. This segment is not just a growth driver for Alibaba but is also deemed critical for China’s ambitious goal of becoming the global leader in AI by 2030, positioning Alibaba as a key beneficiary of national strategic priorities.
Nvidia: The AI Powerhouse Tepper Can’t Ignore
Despite Alibaba’s top spot, Tepper’s fund significantly boosted its stake in Nvidia (NVDA) by a remarkable 483% in Q2 2025. This marked a reversal of his earlier strategy, where he had been selling Nvidia stock throughout the first nine months of 2024. Tepper’s renewed interest aligns with Nvidia’s undeniable dominance in AI-accelerated data centers.
Nvidia’s Hopper (H100) graphics processing unit (GPU) and its successor, the Blackwell GPU architecture, remain light-years ahead of the competition in computing speed, making them the preferred choice for AI-driven software and systems. The company’s proprietary CUDA software platform further solidifies its ecosystem, ensuring customer loyalty and enabling developers to extract maximum performance from Nvidia GPUs for building large language models. Major hyperscalers such as Microsoft, Meta Platforms, Amazon, and Alphabet are among Nvidia’s prominent clients, buying its GPUs in bulk.
However, Tepper’s traditional deep-value approach makes his substantial Nvidia stake intriguing. Despite a pull-back from its price-to-sales (P/S) ratio peak of over 42 last summer, Nvidia’s current P/S ratio of close to 30 is still significantly above its historical norm. This high valuation raises concerns about potential bubble territory, particularly given the historical tendency for investors to overestimate early adoption of new technologies, often leading to eventual market corrections.
Intel: A Deep-Value Bet Appaloosa Dumped
Conversely, Tepper made a striking move in the fourth quarter of 2024 by dumping 1.5 million shares of chipmaker Intel (INTC), representing a substantial 60% reduction in his fund’s position. This aggressive sale is particularly noteworthy given Intel’s historically cheap valuation, trading at a 9% discount to book value as of February 2025.
Intel’s challenges are well-documented: a delayed pivot to enterprise GPUs and cloud computing, and market share losses in CPUs to rivals like Advanced Micro Devices (AMD). The significant capital expenditure involved in building out its foundry services from scratch has heavily impacted its bottom line. Despite these hurdles, Intel is fundamentally a deep-value stock that would typically attract an investor like Tepper.
For instance, Intel’s Gaudi AI chips offer an attractive price point, a crucial advantage as AI-GPU scarcity potentially ebbs and businesses seek alternatives to Nvidia’s premium pricing and extensive backlogs. Furthermore, a protectionist stance on domestic AI intellectual property, as championed by figures like former President Donald Trump, could benefit Intel by promoting US AI supremacy and providing opportunities to challenge Nvidia’s GPU dominance. The possibility of spinning off its foundry business could also unlock significant value for shareholders by streamlining its profitable chip segments from heavy losses, a classic value-investing play.
Tepper’s Broader AI Portfolio: A Glimpse into Diversification
Beyond Alibaba, Nvidia, and Intel, Tepper’s Appaloosa Management holds a diversified portfolio of AI-related stocks, reflecting his comprehensive view of the AI revolution. His top 10 holdings alone include seven companies with significant AI ties, with others like Amazon (third largest position), Alphabet (eighth largest), and Microsoft (tenth largest) featuring prominently due to their hyperscaler status and extensive AI integrations. Other notable AI investments include:
- Meta Platforms: Leveraging AI extensively across its social media platforms and spearheading the AI glasses market.
- Uber Technologies: An “AI-first” company for years, integrating AI throughout its operations to optimize logistics and services.
- Micron Technology (MU): A substantial $154.5 million stake, betting on its heavy investments in high bandwidth memory (HBM) production, projected to generate billions in sales by fiscal 2025.
- Qualcomm Inc (QCOM): A $167.3 million position, poised to benefit from new growth catalysts in AI PCs and AI handsets with its Snapdragon mobile platforms.
- Adobe Inc (ADBE): A $199.9 million stake, successfully integrating AI tools like Firefly and Gen Studio into its creative and digital experience segments to enhance product offerings and attract new users.
- Advanced Micro Devices (AMD): With a $222.2 million stake, AMD is gaining traction in data centers with its Instinct MI300 series and aggressive annual chip release roadmap, directly competing with Nvidia.
- Oracle Corp (ORCL): While Tepper significantly reduced his stake, Oracle’s remaining $282.4 million position reflects its strategic importance. The company’s cloud infrastructure (OCI) is securing major AI deals with partners like OpenAI/Microsoft Azure and Google Cloud, despite recent weak earnings.
- Vistra and NRG Energy: These utility companies provide critical electric power for data centers that host AI applications, representing an indirect but essential bet on AI infrastructure.
Tepper’s moves highlight the complexity and multi-faceted nature of investing in AI. While he embraces high-growth, high-valuation leaders like Nvidia, his largest AI conviction lies in a deep-value Chinese tech giant, emphasizing the importance of broader market trends and potential economic stimuli. His decision to exit Intel, a traditional value play with AI potential, further underscores his willingness to go against conventional deep-value wisdom in pursuit of what he perceives as the most compelling long-term opportunities.
The Long-Term Investor’s Perspective
Tepper’s portfolio underscores that the AI investment thesis extends far beyond just semiconductor leaders. It encompasses cloud infrastructure, software, specialized memory, and even the fundamental utilities powering the AI revolution. For long-term investors, Tepper’s strategy suggests:
- Diversification is Key: Exposure to various facets of AI, from hardware to software and infrastructure, can mitigate risks.
- Geopolitical and Macro Factors Matter: Economic stimuli or regulatory environments can significantly impact even leading tech companies, as seen with Alibaba.
- Value Amidst Growth: While growth stocks dominate headlines, undervalued plays with strong AI catalysts can offer significant upside.
The disclosures provide invaluable insights for those looking to build wealth in the AI era. As the AI revolution continues to unfold, understanding the nuanced strategies of seasoned investors like David Tepper offers a crucial compass for navigating the opportunities and challenges ahead. For more detailed information on regulatory filings, investors can consult the official SEC Form 13F explanation.
