For some investors, earnings season is the pinnacle of each quarter. This six-week period, where many of Wall Street's most influential businesses lift the hood on their operating results, provides investors with invaluable information.
However, an equally strong argument can be made that the quarterly filing of Form 13Fs with the Securities and Exchange Commission is just as important as earnings season. A 13F offers investors a way to see which stocks Wall Street's top money managers have been buying and selling. In other words, these filings clue investors in to the stocks, industries, sectors, and trends that have piqued the interest of highly successful asset managers.
Arguably no trend has been hotter than the rise of artificial intelligence (AI). Empowering software and systems with the tools to make split-second decisions without human intervention is a multitrillion-dollar global opportunity, which explains why AI stocks have soared.
Image source: Getty Images.
But not all of Wall Street's prominent billionaire fund managers are along for the ride.
Based on 13Fs filed in mid-May that detail first-quarter trading activity, Appaloosa's billionaire chief David Tepper has been a big-time seller of three red-hot AI stocks -- Nvidia (NVDA +2.59%), Advanced Micro Devices (AMD +3.50%), and Taiwan Semiconductor Manufacturing (TSM +1.40%), or TSMC -- over the previous year. Curiously, though, Tepper has been loading up on another AI stock that somewhat recently joined the exclusive trillion-dollar club.
Billionaire David Tepper has been a persistent seller of Nvidia, AMD, and TSMC stock
Tepper and his team tend to be fairly active and are regularly building up or reducing their existing stakes. Rather than looking at changes from the prior three-month period, more wisdom can often be gained by examining year-over-year changes to Appaloosa's more than $8 billion dollar investment portfolio.
Between April 1, 2024, and March 31, 2025, Tepper oversaw a significant reduction in, or the complete exit from, three of the AI revolution's top companies:
- Nvidia: 4,120,000 shares sold (93% reduction), which has been adjusted to account for Nvidia's 10-for-1 stock split in June 2024.
- Taiwan Semiconductor: 230,000 shares sold (46% reduction).
- Advanced Micro Devices: 1,630,000 shares sold (completely exited position).
NASDAQ: NVDA
Key Data Points
All three of these companies have been successful in their own right within the AI arena. Nvidia's graphics processing units (GPUs) account for the bulk of GPUs deployed in AI-accelerated data centers, while AMD's Instinct series chips are slowly adding market share. Meanwhile, TSMC is the world's leading chip-fabrication company, with its chip-on-wafer-on-substrate capacity rapidly expanding to satiate growing enterprise demand for AI infrastructure.
If everything is going to well for Nvidia, AMD, and TSMC, the question that has to be asked is: Why did billionaire David Tepper sell over a 12-month period?
Simple profit-taking is one of the more logical answers. All three companies have seen their shares appreciate noticeably over the trailing-three-year period, and Tepper has demonstrated he's not shy about locking in gains. What's worrisome is there may be more to this persistent selling activity than just a desire to take some chips off the table.
For example, every next-big-thing technology since (and including) the proliferation of the internet in the mid-1990s has navigated its way through a bubble that eventually burst. In plainer English, investors continually overestimate the adoption rates and/or utility of game-changing technological advances. It's going to take time for AI to mature as a technology and for businesses to figure out how to optimize their solutions and generate a positive return on their investments. This suggests another bubble may be brewing.
NYSE: TSM
Key Data Points
Whereas Taiwan Semiconductor is a diversified company that generates a meaningful percentage of its net sales from fabricating chips for smartphones, Internet of Things, and automotive, Nvidia and AMD are increasingly reliant on enterprise GPU orders. If an AI bubble were to form and burst, these two companies would be hit hard.
Valuation may have also come into play for Appaloosa's billionaire chief. Historically, industry-leading businesses thriving on the heels of a next-big-thing trend have topped out at 30 to 40 times trailing-12-month sales. Nvidia's price-to-sales (P/S) ratio is 31, as of this writing.
With the stock market also historically pricey, Tepper may view Nvidia, AMD, and TSMC as being on shakier ground than their respective share prices would indicate.
Image source: Getty Images.
This trillion-dollar AI stock is bucking the trend in Tepper's fund
Whereas billionaire David Tepper has been an undeniable seller of artificial intelligence stocks over the trailing year, based on 13F filings, there's one trillion-dollar AI stock that's managed to buck the trend. During the March-ended quarter, Appaloosa gobbled up 130,000 shares of Broadcom (AVGO +4.69%), which is one of only 11 public companies around the world to have ever reached a $1 trillion valuation.
While Nvidia and AMD have locked down the lion's share of GPU market share in AI-accelerated data centers, Broadcom is the preferred choice for its host of AI networking solutions. Its products are capable of connecting tens of thousands of AI-GPUs in order to maximize compute capacity, as well as minimize tail latency. Put simply, Broadcom's hardware reduces lag, which facilitates the split-second decisions that need to be made by AI-empowered software and systems.
Broadcom is also making a name for itself thanks to its custom AI chips. During the company's fourth-quarter conference call in late 2024, CEO Hock Tan opined that a few of its hyperscaler clients could spend anywhere from $60 billion to $90 billion in fiscal 2027 (its fiscal year ends in late October or early November). As long as AI remains a hot trend, Broadcom is expected to be one of the more unstoppable stocks.
NASDAQ: AVGO
Key Data Points
But what Appaloosa's Tepper might appreciate most about Broadcom is that it's much more than just an AI-driven company. While AI is, unquestionably, Broadcom's most meaningful growth driver at the moment, it has plenty of other channels that generate sales and positive operating cash flow.
Before AI became the hottest thing on Wall Street, Broadcom was known for its lead role in developing wireless chips and accessories used in next-generation smartphones. Even though smartphones aren't the growth story they were a decade ago, the ongoing expansion of 5G service globally provides a modest growth opportunity for Broadcom.
In addition, it offers an assortment of solutions for industrial product lines and automobiles, as well as owns an enterprise cybersecurity solutions division. The point being that if the AI bubble were to burst, Broadcom would, in all likelihood, be in better shape to navigate the coming storm than hardware giants Nvidia and AMD.
Lastly, Tepper may have found Broadcom's valuation more palatable than the likes of Nvidia. As of this writing on Aug. 5, Broadcom is valued at 35 times forward-year earnings, but appears to be sporting a sustainable annual growth rate of 20% or greater.
