Billionaire David Tepper Is Selling Nvidia, AMD, and TSMC, and Loading Up On Shares of This Trillion-Dollar Artificial Intelligence (AI) Stock Instead

Core Insights - Appaloosa's billionaire chief David Tepper has been a significant seller of AI stocks, particularly Nvidia, AMD, and TSMC, while increasing his position in Broadcom, a trillion-dollar AI stock [1][6][15] Group 1: AI Stock Market Trends - The rise of artificial intelligence (AI) represents a multitrillion-dollar global opportunity, leading to a surge in AI stock prices [3] - Tepper's selling of Nvidia, AMD, and TSMC raises questions about the sustainability of their stock prices amid potential market corrections [9][10] - Historical trends suggest that technology stocks often experience bubbles, indicating a possible overvaluation in the current AI market [10] Group 2: Tepper's Investment Strategy - Tepper's strategy includes significant reductions in his holdings: 4,120,000 shares of Nvidia (93% reduction), 230,000 shares of TSMC (46% reduction), and a complete exit from 1,630,000 shares of AMD [13] - The decision to sell may be driven by profit-taking, as all three companies have seen substantial share price increases over the past three years [9] - Valuation concerns are evident, with Nvidia's price-to-sales (P/S) ratio at 31, suggesting a potentially shaky ground for these stocks [12] Group 3: Broadcom's Position - Broadcom has bucked the trend of Tepper's selling, with Appaloosa acquiring 130,000 shares, highlighting its strong position in AI networking solutions [15][16] - Broadcom's custom AI chips and networking solutions are critical for maximizing compute capacity in AI applications, positioning it favorably in the market [16][17] - The company has diversified revenue streams beyond AI, including wireless chips and cybersecurity solutions, which may provide stability if the AI market faces challenges [20]