Billionaire David Tepper Dumps 93% of Appaloosa’s Oracle Stake - Bets Big on Wall Street’s Most Crucial AI Stock

Hedge fund titan David Tepper just executed a massive portfolio pivot that's sending shockwaves through Wall Street.

The Oracle Exodus

Appaloosa Management slashed its Oracle position by a staggering 93% - dumping nearly all of its stake in the legacy tech giant. This isn't just portfolio trimming; it's a full-scale strategic retreat from one of tech's established players.

AI Gambit Revealed

Tepper redirected the capital into what analysts are calling Wall Street's most important artificial intelligence stock. The move signals a fundamental belief that AI represents the next frontier for market-beating returns - and that this particular company holds the keys to the kingdom.

Wall Street's usual herd mentality means most funds will probably notice this trade about six months too late - just in time for the next rotation. Meanwhile, Tepper's already positioning for the AI revolution that's reshaping finance itself.

Image source: Getty Images.

For example, billionaire David Tepper has been finding incredible stocks hiding in plain sight for his fund, Appaloosa, spanning more than three decades. He's also a huge fan of the artificial intelligence (AI) revolution, but has been particular about the AI stocks he's buying and sending to the chopping block.

Looking back at more than a year of Appaloosa's 13Fs reveals that Tepper has been a seller of cloud infrastructure goliath(ORCL -5.57%) for five consecutive quarters. These filings also show that he's more than doubled his fund's stake in what might be considered the most-critical of all AI stocks -- and I'm not talking about(NVDA 0.35%).

Skyrocketing AI stock Oracle has nearly been given the heave-ho

At the end of March 2024, Appaloosa's position in Oracle peaked at 2,300,000 shares. Since then, Tepper has been a persistent seller, with this stake being slashed by 93%:

• Q2 2024: 300,000 shares sold
• Q3 2024: 426,606 shares sold
• Q4 2024: 173,394 shares sold
• Q1 2025: 700,000 shares sold
• Q2 2025: 550,000 shares sold (150,000 shares remaining)

In hindsight, this is a MOVE David Tepper has probably been kicking himself over in recent months. Over the trailing-six-month period, shares of Oracle have doubled, with liftoff occurring earlier this month when the company dazzled Wall Street with its forward-looking sales guidance.

Oracle's fiscal 2026 first-quarter operating results featured a 359% increase in its remaining performance obligations (RPOs) to $455 billion. RPOs represent the value of future revenue from signed contracts.

What's more, CEO Safra Catz projected Oracle Cloud Infrastructure sales WOULD catapult from approximately $10.3 billion in fiscal year (FY) 2025 to $144 billion by FY 2030. For those of you keeping score at home, this works out to a scorching-hot compound annual growth rate of 69.5% for this high-margin, AI-driven segment.

Why did Tepper sell nearly all of Appaloosa's stake in Oracle? Simple profit-taking is one logical answer. Shares of Oracle had rallied by nearly 50% between the end of March 2024 and the midpoint of November 2024. This is a pretty big move for a megacap company.

Appaloosa's billionaire chief may have also been concerned about the stock market's historically pricey valuation. The's Shiller price-to-earnings (P/E) Ratio ended Sept. 19 just a few hundredths from cresting a multiple of 40, which is a level that's only been achieved two times during continuous bull markets spanning 154 years. Historical precedent strongly suggests the stock market is due for regression, and leading growth stocks like Oracle could be among the hardest-hit companies.

The other factor that might have come into play is Oracle's inability to meet or beat consensus earnings per share (EPS) expectations. Following the release of its fiscal first-quarter operating results, Oracle has missed the consensus EPS estimate of analysts in three of the last four quarters.

Image source: Getty Images.

Wall Street's most important AI stock is back on billionaire David Tepper's menu

On the other end of the spectrum, billionaire David Tepper changed his tune and became a buyer of AI hardware stocks in the June-ended quarter of 2025. He purchased shares of Nvidia for the first time in two years and added 8 million shares of(INTC 8.82%).

But the biggest about-face in the hardware space is a company that's, arguably, even more important than Nvidia to the evolution of AI. I'm talking about world-leading chip fabrication company(TSM -1.46%), which is commonly referred to by its shorthand, "TSMC."

Despite halving Appaloosa's stake in TSMC from 500,000 shares to 250,000 shares between March 31, 2024 to Dec. 31, 2024, Tepper has been a big-time buyer in each of the last two quarters:

• Q1 2025: 20,000 shares purchased
• Q2 2025: 755,000 shares purchased (1,025,000 total shares held)

While there's no argument that Nvidia's AI-graphics processing units (GPUs) are the brains powering split-second decision-making and large language model training in AI-accelerated data centers, these chips don't get made without chip-fabricating juggernaut TSMC.

Taiwan Semiconductor Manufacturing plays a critical role in the AI supply chain via its chip-on-wafer-on-substrate (CoWoS) technology. TSMC's CoWoS technology packages the high-bandwidth memory needed in high-compute data centers. Advanced AI chip orders represent TSMC's biggest growth opportunity, with no other chip fabricators more important to the success of the AI revolution than TSMC and its efforts to expand monthly CoWoS capacity.

But what Tepper might really appreciate is TSMC's sales diversification and addressable opportunity beyond the AI arena. For instance, TSMC is a key fabricator for wireless chips and accessories used in smartphones, as well as Internet of Things devices and next-generation automobiles. Though these segments aren't growing at the same lightning-fast pace as advanced AI chips, they offer a steady floor and predictable cash flow.

The final piece of the puzzle for Appaloosa's billionaire boss is that Taiwan Semiconductor is less-costly than most trillion-dollar stocks on the basis of forward-year earnings. Tepper was piling into TSMC stock during the second quarter at a forward P/E ratio ranging from 12 to 18. With TSMC projected for solid double-digit sales growth, this was an attractive entry point.