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Appaloosa Management’s Strategic Shift
David Tepper’s Appaloosa Management has exited its positions in Intel and Oracle in Q3 2023, focusing instead on high-growth AI infrastructure stocks such as Advanced Micro Devices (AMD) and Nvidia. Tepper has built a nearly $154 million stake in AMD, accounting for about 2% of the firm’s portfolio, while increasing Nvidia’s stake to 4.8% following the addition of almost 150,000 shares. This move aligns with the ongoing demand for AI technologies, with Nvidia reporting a 66% year-over-year growth in data center revenues, reaching $51.2 billion.
Market Impact and Insights
Global semiconductor sales are projected to hit $1 trillion by 2030, positioning AMD and Nvidia as key players in the AI market. Tepper’s shift away from Intel, which has faced market share losses, and Oracle, which has seen concerns over high debt and valuation, indicates a strategic pivot towards companies with robust growth potential amid fears of an AI bubble.
Financial Data
Nvidia has shipped $150 billion worth of orders for its AI systems, with an additional $350 billion expected by 2026. AMD’s data center revenues rose 22% year-over-year to $4.3 billion in Q3, driven by strong demand for its GPU series and server CPUs.
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