Billionaire David Tepper's Appaloosa hedge fund has 45 holdings. That's large enough to be diversified. However, it's still small enough that it matters significantly which individual stocks and exchange-traded funds (ETFs) are in Appaloosa's portfolio.
When Tepper slashes a position in a given stock and loads up on others, it's worth noting. The hedge fund manager did just that in the third quarter of 2025. Here's why Tepper sold 92% of UnitedHealth Group (UNH +1.07%) and is buying three other stocks instead.
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Bailing on a healthcare giant
Appaloosa has owned a stake in UnitedHealth Group for years. However, Tepper aggressively bought the healthcare stock in the second quarter of 2025, adding roughly 2.28 million shares.
In August 2025, I wrote about Tepper's big Q2 purchase of UnitedHealth Group. My theory was that it's "rare for a blue chip stock to be available at a steep discount." I suspected that Tepper simply saw an opportunity to buy on the cheap and capitalized on it.
But why did the billionaire sell 2.25 million shares of UnitedHealth (nearly all of the shares bought in Q2) just one quarter later? Maybe profit-taking was his motive. If Tepper added more shares of UnitedHealth at the lowest point in Q2 and sold at the highest point in Q3, he would have pocketed a gain of around 29%. That's a tidy profit in such a short period.
NYSE: UNH
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However, we don't know for certain if Tepper was such a great market timer with UnitedHealth Group. If he wasn't, perhaps he expected a bigger rebound over the near term and decided other stocks could make more money more quickly. Whatever his reasoning, Tepper has a long history of buying and selling UnitedHealth Group shares.
A whirlpool of AI stock buying
The more interesting question, in my opinion, is: What did Tepper do with the cash freed up by drastically reducing Appaloosa's stake in UnitedHealth? Thanks to the hedge fund's 13F filing for Q3, we know the answer.
Tepper's biggest purchase in Q3 was increasing Appaloosa's stake in Whirlpool (WHR +1.30%) by a whopping 1,967%. I suspect he liked the home appliance manufacturer's valuation after its shares plunged more than 40% below the peak set earlier in the year.
NYSE: WHR
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Appaloosa added smaller numbers of shares to other existing holdings. The hedge fund also upped its stake in KraneShares CSI China Internet ETF (KWEB 0.64%) by 85%.
However, Tepper's other top purchases of individual stocks were with two artificial intelligence (AI) leaders. He bought 895,000 additional shares of Qualcomm (QCOM +1.13%), enough to boost Appaloosa's position in the chipmaker by 256%. Tepper also initiated a significant new position in Advanced Micro Devices (AMD +3.94%).
NASDAQ: AMD
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Why did the billionaire invest heavily in Qualcomm and AMD? The most plausible answer is that he anticipates both companies will become more successful in the AI chip market. AMD is already a top rival to the market leader, Nvidia (NVDA +1.37%). Qualcomm ranks as a major player in the chip market for edge AI applications and plans to compete against AMD and Nvidia with its new AI200 AI accelerator chips.
Should other investors copy Tepper's moves?
Never buy or sell a stock solely because a famous investor is doing so. Your investing goals and risk tolerance may be quite different from theirs.
In my opinion, selling shares of UnitedHealth Group right now isn't a great move for long-term investors. I expect the company's business to improve significantly beginning next year.
I'm on the fence with Tepper's purchase of Whirlpool stock. While Whirlpool's valuation looks attractive with a forward price-to-earnings ratio of 12, the economic uncertainty makes me somewhat cautious about buying a consumer cyclical stock.
On the other hand, I like Tepper's Q3 moves related to AMD and Qualcomm. AMD especially looks like a great pick over the next few years as it carves out a greater share of the AI chip market.
