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. (NYSE: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. (NYSE:FMC) and General Motors Co. (NYSE: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. (NYSE:MAS), Mohawk Industries Inc. (NYSE:MHK), and Owens Corning (NYSE:OC).

According to a report by Investopedia, Appaloosa reduced its positions in several tech firms, including Advanced Micro Devices (NASDAQ:AMD), Alphabet Class C stock (GOOG), Qualcomm Inc. (NASDAQ:QCOM), Uber Technologies (NYSE:UBER), and Taiwan Semiconductor Manufacturing Co. (NYSE:TSM). The largest sell-off involved nearly 1.7 million shares of Intel Corp. (NASDAQ: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. (NYSE:BEKE), Macy’s Inc. (NYSE:M), and PDD Holdings Inc. (NASDAQ:PDD). On the flip side, Appaloosa added to its existing positions in Caesars Entertainment Inc. (NASDAQ:CZR), MPLX LP (NYSE:MPLX), Alibaba Group Holding (NYSE:BABA), Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT).

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