5 Shocking Moves: Why Billionaire David Tepper Sold Nvidia, AMD, And TSMC In Q3 2024

Billionaire investor David Tepper, the founder of Appaloosa Management, executed a massive and highly contrarian portfolio rotation during the third quarter of 2024, making headlines across the financial world. The firm’s latest 13F filing, submitted to the SEC on November 14, 2024, revealed a dramatic reduction in stakes across several high-flying, artificial intelligence (AI)-related chip stocks, specifically Nvidia (NVDA), Advanced Micro Devices (AMD), and Taiwan Semiconductor Manufacturing Company (TSMC).

This aggressive move away from some of the market’s biggest winners suggests a significant shift in Tepper’s investment thesis, moving from high-growth momentum plays to a more value-oriented and selective contrarian approach. The sales of these semiconductor giants were not isolated incidents but part of a broader strategy to lock in profits and reallocate capital into new, seemingly overlooked sectors and a select few new AI bets.

David Tepper: The Contrarian King of Appaloosa Management

David Alan Tepper is one of the most respected and feared hedge fund managers on Wall Street, known for his aggressive, often contrarian, and highly successful investment style. His career is defined by a knack for making massive, high-conviction bets on distressed assets and sectors poised for a turnaround, earning him a reputation as a "vulture investor" and a "distressed debt wizard."

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• Full Name: David Alan Tepper
• Date of Birth: September 11, 1957
• Education: University of Pittsburgh (B.A.), Carnegie Mellon University (M.B.A.)
• Current Role: Founder and President of Appaloosa Management, L.P.
• Hedge Fund Founded: 1993
• Net Worth: Estimated at over $20 billion (as of late 2024)
• Notable Ownership: Owner of the Carolina Panthers (NFL team) and Charlotte FC (MLS team).
• Investment Style: Value-oriented, distressed debt, and event-driven investing, with a recent focus on large-cap technology stocks.

Tepper’s investment philosophy is centered on finding assets that are fundamentally undervalued due to temporary market pessimism or distress. His Q3 2024 moves, however, show a more dynamic, profit-taking strategy in the tech sector, coupled with deep-value bets in other areas of the market.

The Great Semiconductor Sell-Off: Why Tepper Dumped NVDA, AMD, and TSM

The core of Appaloosa’s Q3 2024 strategy involved dramatically trimming its exposure to the semiconductor industry, specifically the trio that has been driving the AI boom: Nvidia, AMD, and TSMC. For a fund manager who had previously made a massive, successful bet on the AI trend, the sales signal a belief that the risk/reward profile of these stocks has fundamentally changed after their blistering run.

1. Nvidia (NVDA): The Profit-Taking Apex

The most significant move was the near-complete dismantling of Appaloosa’s position in Nvidia (NVDA). The Q3 2024 filing revealed a massive reduction in the firm’s holdings, with some estimates citing a cut of over 84% to 93% of the previous stake.

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The Rationale: Locking in Peak Profits. Tepper is a master of market timing, and his move suggests he views Nvidia’s valuation as having peaked, or at least priced in too much future growth. After a multi-year rally that saw the stock soar on the back of its dominance in AI accelerators, the sale is a classic example of a manager taking chips off the table. The sheer scale of the profit-taking indicates a high-conviction belief that the easy money in the AI hardware trade has been made, and that a rotation is necessary before a potential market correction or slowdown in growth.

2. Advanced Micro Devices (AMD) and TSMC (TSM): Broader Chip Skepticism

The skepticism extended beyond just Nvidia. Appaloosa also significantly reduced its stake in Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker and a crucial supplier to both Nvidia and AMD. Furthermore, Appaloosa was reported to have been trimming its Advanced Micro Devices (AMD) position throughout 2024, leading to a near-total exit in the third quarter.

This simultaneous sale of the three largest semiconductor entities—the designer (NVDA/AMD), and the manufacturer (TSMC)—points to a holistic view: Tepper is de-risking his portfolio from the entire high-end chip supply chain. This move is often interpreted as a hedge against potential oversupply, increased competition, or a cyclical downturn in the semiconductor industry, which is notoriously volatile. He also exited his position in Intel (INTC), reinforcing the broad-based retreat from legacy and high-growth chipmakers alike.

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The Contrarian Reallocation: Tepper's Two New High-Conviction Bets

The massive capital freed up from the semiconductor sales was quickly redeployed into a handful of high-conviction bets, revealing the next phase of Tepper’s investment strategy. This "massive rotation" focused on a new AI chipmaker and a surprising bet on Chinese e-commerce.

3. The New AI Bet: Piling Into Broadcom (AVGO)

While Tepper was selling the old guard of AI chips, he was simultaneously "piling into" a new favorite: Broadcom (AVGO).

• Action: Appaloosa significantly increased its position in Broadcom, making it a key component of the firm's portfolio.
• The Thesis: Broadcom is a major player in custom AI chips (ASICs) for hyperscalers like Google and Meta Platforms, and its software division provides a stable, high-margin revenue stream. By selling Nvidia and buying Broadcom, Tepper is essentially making a sophisticated, tactical switch within the AI hardware space. He is betting on the trend of large cloud providers designing their own chips, which benefits Broadcom's ASIC business, as opposed to relying solely on Nvidia’s off-the-shelf solutions. This is a bet on the diversification of the AI supply chain.

4. The China Comeback Play: PDD Holdings (PDD)

Perhaps the most surprising new position was the aggressive investment in PDD Holdings (PDD), the parent company of e-commerce giants Pinduoduo and Temu.

• Action: PDD Holdings became a major new position in the Appaloosa portfolio during Q3 2024.
• The Thesis: Tepper has a history of making contrarian bets on Chinese tech stocks, with Alibaba (BABA) remaining a top holding (at over 15% of the portfolio). The PDD investment, alongside an increased position in the KraneShares China Internet ETF (KWEB), suggests Tepper sees deep value and an inflection point in the beaten-down Chinese internet sector. The bet is on a regulatory thaw and the massive, underappreciated growth potential of companies like Temu in the global market.

5. Other Notable Moves: Industrials and Value

The Appaloosa 13F filing also highlighted several other significant adjustments that paint a picture of a fund manager preparing for a potentially more volatile or value-driven market environment:

• Increased Stake in Whirlpool (WHR): Appaloosa increased its holdings in the appliance manufacturer, suggesting a play on a potential housing market rebound or simply a deep-value stock in the industrials sector.
• New Positions: The firm initiated new stakes in other entities, including Fiserv (FISV) and American Airlines (AAL), further diversifying away from pure-play tech into financial services and transportation.
• Top Holdings Remain: Despite the rotation, Tepper maintained high-conviction positions in established giants, with Alibaba (BABA) and Amazon (AMZN) remaining the two largest holdings in the portfolio, confirming his belief in the long-term dominance of these e-commerce and cloud infrastructure leaders.

The Tepper Effect: What His Moves Signal for the Market

David Tepper’s portfolio adjustments are closely watched because his high-conviction moves often precede broader market trends. The Q3 2024 filing, which showed him selling Nvidia, AMD, and TSMC, and buying Broadcom and PDD Holdings, sends a clear message to the investment community:

The era of buying "any" AI-related stock and expecting outsized returns may be over. Tepper is signaling that the market is moving from a broad-based AI infrastructure rally to a more selective, value-conscious phase. His shift from Nvidia to Broadcom is a tactical rotation within the AI space, favoring a company with a more diversified revenue base and exposure to the custom chip trend. Meanwhile, his aggressive move into Chinese internet stocks is a classic contrarian maneuver, betting on a recovery in a deeply out-of-favor sector. For investors, Tepper’s latest actions serve as a powerful reminder of the importance of disciplined profit-taking and the continuous search for undervalued opportunities outside of the crowded, high-momentum trades.