Hedge fund titan David Tepper, through Appaloosa Management, has significantly reconfigured his investment portfolio in the first quarter of 2025. The strategic shift involved substantial reductions in holdings of major AI chip manufacturers, including NVIDIA, AMD, and TSMC. Tepper divested approximately 4.12 million NVIDIA shares, marking a 93% reduction in his stake. His entire holdings of 1.63 million AMD shares were also sold, and his position in TSMC was reduced by 46%, amounting to 230,000 shares. These moves indicate a strategy of profit-taking and a potential concern over current valuations after considerable stock price appreciation in these semiconductor giants.
In contrast to his reduced exposure to direct AI hardware, Tepper strategically acquired 130,000 shares of Broadcom, a key player in AI networking solutions. Broadcom's diversified business model, encompassing AI chips, 5G technology, and cybersecurity, presents a potentially more robust investment. This pivot suggests a preference for broader AI infrastructure plays over concentrated bets on specific hardware components. As of August 15, 2025, market movements reflected these shifts, with NVIDIA trading at $182.02 (+0.25%), AMD at $180.95 (-1.88%), TSMC at $241.00 (-0.20%), and Broadcom at $311.23 (+0.69%). These figures illustrate the dynamic nature of the tech market, influenced by investor sentiment and strategic capital allocation. The broader market sentiment towards AI continues to be strong, with hedge funds collectively increasing their investments in Big Tech and AI development, as noted by Finimize. Funds like Bridgewater Associates and Tiger Global have been actively increasing their stakes in companies at the forefront of the AI revolution, underscoring a general confidence in the long-term growth trajectory of artificial intelligence, even as individual investors like Tepper adjust their specific holdings. The surge in AI exposure is driving the launch of new hedge funds, with some, like Leopold Aschenbrenner's Situational Awareness, achieving significant assets under management and strong early returns, as reported by Hedgeweek. Tepper's strategic reallocation aligns with a broader market trend where investors are seeking more diversified exposure to the AI ecosystem. While core hardware providers remain critical, the infrastructure that supports and connects these technologies is increasingly recognized for its foundational importance, allowing for participation in the AI boom while potentially mitigating some of the concentrated risks associated with individual chip manufacturers, especially after periods of significant market gains.