Wealthy entrepreneur David Tepper plans to divest from Nvidia and AMD to invest in a forward-thinking corporation with a market potential surpassing $200 billion.
In the world of finance, the moves of influential figures like David Tepper, the billionaire chief of Appaloosa, are closely watched. Recently, Tepper has been making some notable changes to his investment portfolio, selling off shares in AI giants Nvidia and Advanced Micro Devices (AMD), while adding a new investment in the fintech juggernaut, Block.
Tepper has sold a significant number of shares. He completely exited his position in AMD, selling 1,630,000 shares, and reduced his stake in Nvidia stock by 93% (accounting for Nvidia's 10-for-1 stock split in June 2024), selling 4,120,000 shares. This move comes as AMD's Instinct series chips are ramping up, aiming to siphon away market share from Nvidia stock.
On the other hand, Tepper has shown interest in Block, the parent company of Cash App and Square, by purchasing 75,000 shares in the March-ended quarter. This move could signal a belief in the potential of Block, especially considering the rapid expansion in GPV on Square's payment networks. The GPV has seen sustained double-digit growth, primarily due to sustained double-digit growth in international markets and a higher percentage of GPV from larger businesses.
Cash App, another key operating segment of Block, is viewed as a $75 billion addressable opportunity by Ramnani. Both of Block's operating segments, Square ecosystem and Cash App, are arguably still early in their respective expansions. As of the midpoint of 2025, Cash App has 57 million monthly transacting active users, up from 36 million at the end of 2020.
The Square ecosystem, a part of Block, has an estimated addressable market of $130 billion, according to Piper Sandler analyst Arvind Ramnani. Cash App is a higher margin opportunity for Block than the Square ecosystem, with gross profit per Cash App user often heavily outpacing the cost to acquire Cash App actives.
It's important to note that Tepper has not added any fintech companies to Appaloosa's investment portfolio in the last 12 months. Instead, he reduced his stake in TSMC and shifted focus to Broadcom. The average holding period for Appaloosa's securities is two years and five months, suggesting Tepper isn't shy about locking in gains when presented with the opportunity to do so.
This shift in investment strategy by Tepper, one of the most-followed fund managers, is a testament to the growing interest in the fintech sector and the potential of companies like Block. Despite competition increasing in the digital payments arena, Block appears well-positioned to capitalise on a sustained double-digit growth opportunity.
A 13F provides a snapshot for investors of which stocks Wall Street's smartest fund managers are buying and selling. The Securities and Exchange Commission requires institutional investors with at least $100 million in assets under management to file Form 13F no later than 45 calendar days following the end of a quarter. These filings offer valuable insights into the investment strategies of influential figures like Tepper.
As the AI revolution continues, concerns about historical precedent remain. Every game-changing technology has worked its way through an early stage bubble that eventually burst. However, the potential benefits of AI and the digital payments sector are undeniable, and it will be interesting to see how Tepper's investment decisions unfold in the coming months.
Read also:
- Industrial robots in China are being installed at a faster rate than in both the United States and the European Union, as the global market for these robots faces a downturn.
- Hyundai N affirms transition to hybrid performance-centric models, initiating with Tucson N
- EAFO Research Uncovers Crucial Elements in Electric Vehicle Adoption within the EU
- Stock markets in India anticipated a moderate opening, influenced by mixed signals from global markets.
