Why Is David Tepper So Big on China?

On February 10, David Tepper’s hedge fund Appaloosa Management released its 13F for the last quarter of 2024. It makes for interesting reading. 

The portfolio was worth $6.73bn as of December 31, up from $6.46bn at the end of September. The growth in value was driven by a 147% increase in its holding of power generation company Vistra [VST] to $372.25m, an 80% increase in the value of its NRG Energy [NRG] holding to $163.75m, and a 72% rise in the value of its ASML [ASML] holding to $110.89m.

But the most eye-catching moves were Tepper’s China bets. 

He raised his stake in JD.com [JD] by 43%, or approximately 3.17 million shares, and his Alibaba [BABA] stake by 18%, or approximately 1.84 million shares. His position in Baidu [BIDU] increased 7% to approximately 1.53 million, while his PDD Holdings [PDD] stake edged up marginally by 1% to 5.36 million. 

Outside of big tech and e-commerce, Tepper added to his stake in real estate holding company KE [BEKE], increasing it by 18% to approximately 2.57 million shares. 

His buying spree was not just limited to stocks. He increased his holdings by 22% and 14%, respectively, in two major China-focused ETFs, iKraneShares CSI China Internet [KWEB] and iShares China Large-Cap [FXI].

All in all, Chinese equities and China-focused funds accounted for approximately 37% of Appaloosa’s portfolio value at the end of 2024. 

China Bets Boosted

Tepper has put his money where his mouth is. 

Late last year, he told CNBC that he would be buying “everything” China-related, including ETFs and futures. Chinese companies were undervalued, he argued, because they had “double-digit growth” but “single-digit” P/E ratios. 

These comments were made on September 26, when Chinese equities were starting to climb out of the doldrums after Beijing had announced a stimulus package to revive its flagging economy. Chinese equities peaked in early October, before falling again, only to pick up steam in January. 

Alibaba’s share price has surged 48.35% since the start of the year, accelerated by the company claiming that its latest large language models can outperform DeepSeek. JD.com’s and PDD’s share prices are up 13.04% and 28.29%, respectively. 

The big question is whether Tepper has continued to double down on Chinese equities and funds in light of the recent bullish moves, or whether he has used the gains as an opportunity to trim his stakes.

Appaloosa’s next 13F, which will be released in the first half of May, should reveal more. 

Nvidia Back on Tepper’s Radar

Another interesting move Tepper made in the last quarter of 2024 was to increase Appaloosa’s Nvidia [NVDA] stake by 9%, adding approximately 55,000 shares. This comes after he sold approximately 65,000 shares in Q3, when the stock had a much higher average closing price than in Q4. 

Speaking to CNBC in September, Tepper explained his reasoning for having sold a lot of his Nvidia stock: “We thought [it] was too high at the time and would come down. Unfortunately, we didn’t buy it when it came back down.”

He told the channel that, while he acknowledged Nvida’s role in the artificial intelligence (AI) boom, he had doubts about the sustainability of meeting AI demand. 

He also expressed reservations about whether Nvidia’s share price can maintain its rise. “I’m not saying it won’t happen,” he said, adding that there are many things that need to fall into place. “I’m just not smart enough to know if they will.” 

For whatever reason, however, Tepper decided at some point in the October–December period that Nvidia was worth a punt again, despite the share price not pulling back during that time. 

Intel Stake Slashed as Gelsinger Exits 

One of the biggest casualties in the 13F was Intel [INTC], with Tepper cutting 60% of his stake, or approximately 1.5 million shares. 

It is not known for sure when the shares were sold, but a possible catalyst could have been Pat Gelsinger resigning on December 1 after he was ousted by the board, who had lost confidence in his turnaround plan. 

Once the highest-valued US-listed semiconductor stock, the chipmaker has been playing catch-up with rivals that have been investing heavily in AI, but has seen its share price crater 40.27% in the past 12 months. 

Tepper also reduced his exposure to US big tech in the December quarter. He cut his holdings in Amazon [AMZN] and Meta [META] by 19% and 22%, respectively, although left his Alphabet [GOOGL] and Microsoft [MSFT] stakes as they were at the end of Q3. 

The only holding Tepper exited in Q4 was Adobe [ADBE]. It is not known whether he sold his stake before the share price tumbled following its Q4 results on December 11.