David Tepper's Appaloosa Revamps Portfolio, Cuts Down On Semiconductor Stocks

In a recent shift of investment strategy, David Tepper‘s hedge fund, Appaloosa LP, has made significant alterations to its portfolio.

What Happened: The firm’s latest 13F filing reveals a reduction in semiconductor holdings, while stakes in other tech stocks, including Oracle Corp. ORCL and the ARK Innovation ETF (ARKK), have been increased.

Appaloosa LP, during the fourth quarter of 2023, purchased 1.3 million shares in Oracle Corp worth approximately $140 million and a call option for nearly 2.6 million shares of the ARK Innovation ETF valued at over $133 million. The hedge fund also established new positions in FMC Corp. FMC and General Motors Co. GM.

Investments were also made in the home improvement, construction, and building materials sectors, with the acquisition of shares in firms such as Masco Corp. MAS, Mohawk Industries Inc. MHK, and Owens Corning OC.

According to a report by Investopedia, Appaloosa reduced its positions in several tech firms, including Advanced Micro Devices AMD, Alphabet Class C stock (GOOG), Qualcomm Inc. QCOM, Uber Technologies UBER, and Taiwan Semiconductor Manufacturing Co. TSM. The largest sell-off involved nearly 1.7 million shares of Intel Corp. INTC.

Also Read: David Tepper, Rausing Family Boost Nvidia Holdings Ahead Of Stock Volatility

Outside of tech, the fund sold off shares in KE Holdings Inc. BEKE, Macy’s Inc. M, and PDD Holdings Inc. PDD. On the flip side, Appaloosa added to its existing positions in Caesars Entertainment Inc. CZR, MPLX LP MPLX, Alibaba Group Holding BABA, Amazon AMZN, and Microsoft MSFT.

The hedge fund also exited two positions entirely in the fourth quarter, selling off shares of Arista Networks ANET and Enterprise Products Partners EPD.

Why It Matters: Appaloosa’s portfolio reshuffle indicates a strategic shift towards diversification. The reduction in semiconductor holdings comes amidst a global chip shortage, potentially signaling a cautious approach.

The increased stakes in other tech stocks and the home improvement sector suggest a focus on industries that have shown resilience during the pandemic. The fund’s new positions in FMC Corp. and General Motors Co. indicate a bet on the agrochemical and automotive industries, respectively.

The sell-offs, on the other hand, might reflect an attempt to mitigate risks associated with specific stocks or sectors.

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