According to the US Securities and Exchange Commission (SEC), Appaloosa Management, a top asset management agency founded and managed by David Tepper (David Tepper), a well-known US billionaire investor and hedge fund legend, submitted a US stock position report (13F) for the first quarter ending March 31, 2024. According to the report, after spending huge sums of money to buy large technology stocks benefiting from the global artificial intelligence (AI) investment frenzy throughout 2023, the top asset manager drastically reduced its holdings of these technology stocks benefiting from the AI investment frenzy in the first quarter of 2024 at an unexpected and aggressive pace, but increased its positions in Chinese securities such as Alibaba and Pinduoduo by a large amount of money.

David Taper's investment strategy in the first quarter seems to be different from the strategy of major Wall Street investors focusing on tech giants. For example, Wall Street banks such as J.P. Morgan Chase and Citi increased their positions on tech giants in the first quarter. J.P. Morgan buys heavily in the first quarter$Apple (AAPL.US)$,$Alphabet-A (GOOGL.US)$,$Microsoft (MSFT.US)$,$NVIDIA (NVDA.US)$and$Amazon (AMZN.US)$Wait for US tech giants. Among Citigroup's top ten major stock positions in the first quarter, only tech giants were increased by Citi in the first quarter. Those that received Citigroup's increased holdings were all major US tech giants that benefited from the AI craze — namely Microsoft, Nvidia, and Apple (AAPL.US).

David Taper spent a lot of money to buy Chinese securities, and Nvidia and Meta, whose stock prices soared, were drastically reduced

According to data on US stock holdings of Appaloosa, Tepor's top asset management agency up to the first quarter, there are only Chinese e-commerce giants among the agency's top five holdings$Alibaba (BABA.US)$It received a huge increase in positions by the agency. According to the 13F disclosure report, Appaloosa, a subsidiary of Tepor, increased its shareholding in Alibaba from 4.35 million shares to about 11.25 million shares. Michael Burry (Michael Burry), the prototype of the movie “The Big Short,” which has always been known for his shorting style, also increased Alibaba's holdings significantly in the first quarter. Scion Asset Management, which he manages, increased Alibaba's holdings by nearly 67% in the first quarter.

Among the agency's top five holdings, position data shows that AppAloosa drastically reduced its holdings of AI chip leader Nvidia and Facebook's parent company Meta (META.US) in the first quarter, with holdings reduction ratios of up to 45% and 40%, respectively. The AI leaders Microsoft and Amazon were also reduced, but their holdings were reduced by 18% and 4%, respectively, far less than the reduction ratio between Nvidia and Meta. Although their holdings have been reduced, these four tech giants still firmly occupy Appaloosa's top five positions. According to historical data, Appaloosa, a subsidiary of Tepper, has bought these four major tech giants in a big way since the first quarter of last year. The logic of this holdings reduction may be to settle profits after achieving huge profits. After all, Nvidia, the AI chip hegemon, has increased as much as 500% since 2023, while Meta increased as much as 300% during the same period.

Furthermore, Appaloosa, a subsidiary of Tepor, was very favored by China Securities in the first quarter. The logic behind it is probably that China Securities are compared to China Securities$S&P 500 Index (.SPX.US)$Extremely attractive valuations for constituent stocks, analysts' relative optimism about the overall profit data of China's internet tech giants, and bets on the overall growth of the Chinese economy.

In addition to Alibaba, another e-commerce giant$PDD Holdings (PDD.US)$It also received a significant increase in the agency's holdings. The number of holdings increased by about 1.33 million shares, bringing the total holdings to 2.1 million shares. This meant that the number of shares increased by about 171%, and the value reached 240 million US dollars, making it the ninth most heavily held stock of the agency. Tech giants$Baidu (BIDU.US)$It received a massive 188% increase in the agency's position. As of the first quarter, it was the tenth most heavily held stock, with a position value of US$190 million. Chinese internet technology giant JD.US (JD.US) was also favored by the agency. It held about 3.65 million shares worth about US$99.97 million in the agency's first quarter.

Few tech giants that were heavily bought by Taper in the first quarter: Oracle and Adobe

Cloud computing service and database software giant$Oracle (ORCL.US)$It is one of the few tech giants that have received a significant increase in Appaloosa, a subsidiary of Tepper. The number of shares held surged 74% from the previous quarter, ranking the agency's eighth-largest stock holdings, with a total value of 289 million US dollars. Oracle, which has benefited from the AI investment frenzy, rose by more than 30% in 2023, and has increased by as much as 16% since this year.

Judging from the increase in revenue over the past year, Oracle's revenue scale has recently regained its growth curve, which largely indicates that this software manufacturer's cloud computing-related services are benefiting from the increase in demand for cloud computing services brought about by the boom in artificial intelligence (AI) in global enterprise layouts. Well-known research institute Wolfe Research once wrote in a report that the booming development of generative artificial intelligence, which requires strong computing power, may boost global companies' strong demand for Oracle cloud computing services.

A software giant that has taken the lead in AI in Taper's Appaloosa new portfolio$Adobe (ADBE.US)$It received the agency's investment of 177 million US dollars to build a new warehouse, ranking 11th in position value. Adobe, a leader in the field of creative software, is committed to building and optimizing its own artificial intelligence model, mainly based on its huge image library for AI training and inference, in an attempt to gain an application-side advantage over startups such as OpenAI by integrating new generative AI technology into industry-standard products such as Photoshop.

Editor/Jeffrey