David Tepper’s Top 4 Stocks: 37% of Portfolio Revealed

David Tepper, the billionaire investor behind Appaloosa Management, has executed notable portfolio adjustments that reveal his current market thesis. Despite publicly stating he feels “miserable” about the market and won’t “fight the Fed,” Tepper has made decisive moves that demonstrate conviction in specific sectors. Most notably, Appaloosa reduced its stake in Broadcom Inc. during the most recent quarter while substantially increasing its position in UnitedHealth Group. The fund also trimmed positions in semiconductor giant Nvidia while increasing exposure to Chinese equities like Alibaba, signaling a strategic reallocation away from some technology sectors toward healthcare and international opportunities.

These adjustments come from an investor with a legendary track record in both stocks and distressed debt, suggesting Tepper sees specific value opportunities despite broader market concerns. His concentration in high-tech, large-cap stocks, many positioned to benefit from the generative AI boom, indicates he believes Appaloosa can continue outperforming the S&P 500. The fund has historically gained from the Magnificent Seven stocks’ run, and while most of these tech darlings have lost momentum, Tepper appears to be betting that “fortune will continue to favor the big” as the next AI wave arrives.

Chinese internet giant Alibaba represents Tepper’s largest holding at just over 12% of Appaloosa’s portfolio, a significant position that underscores his confidence in the battered Chinese equity. BABA stock has gained more than 50% year-to-date, partly driven by China’s stimulus plans, yet remains 63% below its all-time high. This substantial discount from peak valuation aligns perfectly with Tepper’s reputation as a seeker of deep-value opportunities, suggesting he views Alibaba as fundamentally undervalued despite geopolitical and regulatory concerns.

The recent parabolic move in Alibaba shares might give some investors pause about chasing the rally, but Tepper’s substantial position indicates he sees further upside potential. As an e-commerce, AI, and cloud giant, Alibaba stands to benefit from multiple growth drivers as Chinese trade activity increases. For a value investor like Tepper, the combination of significant discount to historical highs, stimulus tailwinds, and core business strengths makes Alibaba a compelling bet on Chinese economic recovery and technological advancement.

Amazon constitutes Appaloosa’s second-largest holding at 10.9% of the portfolio, reflecting Tepper’s conviction in the cloud and e-commerce juggernaut’s AI transformation. Recently, Amazon unveiled impressive AI innovations, including a fully autonomous supply chain, positioning the company to capitalize on the “industrial AI” wave. As robotics and “physical AI” gain investor attention through demonstrable productivity gains, Amazon’s extensive automation capabilities extend beyond warehouses—Morgan Stanley analysis suggests the company could eliminate approximately 14,000 managerial roles to save $3 billion, with AI playing a crucial role in this operational streamlining.

Microsoft represents Tepper’s third-largest position at 8.6% of the portfolio, despite some trimming in the second quarter. The $3 trillion enterprise behemoth has tripled down on AI investments, particularly through its substantial stake in OpenAI, positioning it as a potential leader in achieving artificial general intelligence (AGI). Tepper’s maintained significant exposure to Microsoft suggests he views any pullback as a buying opportunity for what he considers “a must-own for any portfolio seeking to one-up the market.” The strategic reduction likely represents profit-taking after strong performance rather than diminished conviction in Microsoft’s AI-driven growth trajectory.

Meta Platforms completes Tepper’s top four holdings with a 7.6% portfolio weighting, recently hitting new all-time highs as the company leads the charge into the metaverse. Despite the significant rally—including a 90% gain over the past year—Meta stock remains reasonably valued at 29.8 times trailing price-to-earnings, particularly for a company with multiple growth drivers. The company’s latest smart glasses offering provides a glimpse into the post-smartphone era, suggesting Meta maintains its innovation edge beyond social media dominance.

Tepper’s maintained position in Meta despite its strong performance indicates he believes higher highs lie ahead as the company executes its metaverse vision. For investors who missed the substantial past-year gains, Tepper’s positioning suggests focusing on future growth drivers rather than historical performance. As with Microsoft, Meta represents what Tepper considers essential for “upside-seeking investors,” combining innovation leadership with reasonable valuation in a market where many technology stocks trade at premium multiples.

David Tepper’s concentrated portfolio—with 37% allocated to just four stocks—reflects his high-conviction approach to investing. His moves demonstrate a balanced strategy: maintaining positions in established AI leaders like Amazon and Microsoft while increasing exposure to deep-value opportunities like Alibaba. The reduction in semiconductor holdings like Nvidia and Broadcom suggests profit-taking in sectors that have seen enormous runs, redeploying capital into areas with more attractive risk-reward profiles.

Despite his public discomfort with market conditions, Tepper’s portfolio adjustments show active positioning rather than defensive retreat. His increased exposure to Chinese equities indicates he sees compelling value in beaten-down international markets, while his maintained positions in U.S. tech giants suggest continued confidence in their AI-driven growth narratives. For investors following Tepper’s lead, the message appears clear: focus on companies with sustainable competitive advantages, reasonable valuations, and exposure to transformative technologies like AI, while being willing to take contrarian positions in undervalued markets when opportunities arise.