David Tepper, a billionaire investor with a net worth of $20. 6 billion, has demonstrated his ability to make money through strategic investments. One notable example is his sizable position in Nvidia, which he initiated in the first quarter of 2023 and saw substantial gains by year-end. Nvidia now ranks as the fourth-largest holding in Tepper's portfolio at Appaloosa Management. In the fourth quarter of 2023, Tepper focused on several artificial intelligence (AI) stocks but reduced his stake in Nvidia by nearly 23%. Instead, he increased his position in three other AI stocks. Let's take a closer look at these investments. 1. Oracle Oracle was not a part of Appaloosa's portfolio before the fourth quarter, but Tepper invested around $140 million in the stock during that period. This move propelled Oracle to become the 12th-largest holding in the portfolio. Tepper likely values Oracle's growth prospects, as the company's adjusted earnings per share saw a significant 16% increase year over year in Q4. Additionally, the company's cloud infrastructure is attracting a growing number of customers, driven by the demand for generative AI solutions. Oracle's low price-to-earnings-to-growth (PEG) ratio of 1. 08x makes it an appealing AI stock for investors, especially considering its smart partnerships with Nvidia and Microsoft. 2.

Alibaba Group Holding Tepper also augmented Appaloosa's stake in Alibaba Group Holding by almost 21% in Q4. This Chinese tech giant is now the sixth-largest position in the hedge fund's portfolio. Despite Alibaba's slower growth due to economic conditions and setbacks in executing its strategy, Tepper sees potential in the company. Its shares are currently trading at a modest multiple of only 7. 8 times forward earnings, which does not fully reflect its underlying business strength. Patient investors with an appetite for risk could potentially reap significant long-term gains with Alibaba, although caution is advised due to the uncertainties associated with investing in Chinese stocks. 3. Amazon Appaloosa increased its stake in Amazon by over 5%, making it the third-largest position in the fund's portfolio. Tepper has been a long-time supporter of Amazon, first investing in the stock in Q1 of 2019. The company's strong earnings and free-cash-flow growth contribute to Tepper's continued confidence, alongside the promising opportunities presented by Amazon Web Services in the generative AI field. Furthermore, Amazon's expansion into new sectors, including healthcare, adds even more potential for growth and should not be overlooked by investors. In conclusion, David Tepper's investment decisions in the AI sector, particularly his positions in Oracle, Alibaba, and Amazon, demonstrate his ability to identify promising opportunities for long-term gains. These investments could be of interest to a wide range of investors, but it is important to consider the associated risk factors and conduct thorough research before making any investment decisions.