The Motley Foolยท2025-07-10 07:51Core Insights - Appaloosa's David Tepper has significantly reduced or exited positions in 10 high-profile AI stocks over the past year, indicating a shift in investment strategy [1][5][6] - The selling activity may be attributed to profit-taking, as many AI stocks have seen substantial price increases due to strong demand for AI infrastructure [7][8] - Despite the selling trend, Tepper has initiated a position in Broadcom, which is seen as a strategic move given its diverse business model beyond AI [15][18][19] Group 1: Selling Activity - Tepper sold all shares in Advanced Micro Devices (1,630,000 shares), Intel (3,750,000 shares), and reduced stakes in Oracle (1,600,000 shares, 70% reduction) and Microsoft (890,000 shares, 64% reduction) [6][13] - Other notable reductions include Baidu (1,025,000 shares, 57% reduction), Meta Platforms (572,500 shares, 51% reduction), and Nvidia (4,120,000 shares, 93% reduction) [13][12] - The overall trend suggests a cautious approach towards AI stocks, possibly due to concerns over a potential bubble [8][10] Group 2: Market Dynamics - The AI sector has experienced rapid growth, but many companies are not yet generating positive returns on their AI investments, raising concerns about sustainability [8][9] - Regulatory and trade concerns, particularly regarding export restrictions on AI technology to China, may also influence investment decisions [11][12] - Nvidia's growth is heavily reliant on AI-GPUs, making it particularly vulnerable if demand decreases [10][12] Group 3: Broadcom's Position - Broadcom is the only AI-related stock that Tepper has increased his position in, acquiring 130,000 shares [15] - The company provides essential networking solutions for AI data centers, which are critical for optimizing performance [16][18] - Broadcom's diverse business model, including wireless chips and cybersecurity solutions, offers a buffer against potential downturns in the AI market [18][19]