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Quarterly-filed Form 13Fs allow investors an under-the-hood look at which stocks Wall Street's smartest money managers have been buying and selling.
Growth-seeking billionaire investor David Tepper dumped his fund's entire stake in AMD during the March-ended quarter -- and it may have to do with more than just profit-taking.
Meanwhile, Appaloosa's chief loaded up on shares of two companies whose addressable market is expected to catapult from around $88 billion this year to $918 billion in 2033.
Data is the currency that keeps Wall Street's proverbial hamster on its wheel -- and investors are rarely, if ever, short of information to analyze. In fact, it can be argued that between earnings season and near-daily economic data releases, it's easy for something of importance to fly under the radar.
For example, no later than 45 days following the end to a quarter, institutional investors with at least $100 million in assets under management (AUM) are required to file Form 13F with the Securities and Exchange Commission. This filing, which had a deadline of May 15 for the March-ended quarter, allows investors to see which stocks Wall Street's smartest fund managers bought and sold in the latest quarter.
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While investors tend to focus on the 13F of Wall Street's premier money manager, Warren Buffett, he's far from the only billionaire known for their keen insights and supercharged returns. Appaloosa's billionaire chief David Tepper is another asset manager investors wisely pay attention to.
Image source: Getty Images.
Tepper, who's big fan of large-cap growth stocks, closed out March overseeing more than $8 billion in AUM spread across 38 holdings (stocks and options). Over the trailing year (ended March 31, 2025), Tepper has overseen the addition of 13 positions and the complete disposition of 14 stakes.
Among these numerous transactions, the most eye-popping just might be Tepper's complete exit from artificial intelligence (AI) favorite Advanced Micro Devices (NASDAQ: AMD), and his aggressive purchasing of two industry-leading companies whose addressable markets are forecast to grow tenfold over the next eight years.
With the stock market entering 2025 at its third priciest valuation when back-tested to 1871, based on the Shiller price-to-earnings ratio, Appaloosa's billionaire investor hasn't been shy about ringing the register and/or taking some of his fund's chips off the table. Between April 1, 2024 and March 31, 2025, he green-lit the sale of 1,630,000 shares of Advanced Micro Devices, which is commonly referred to by its shorthand, "AMD."
Despite Nvidia being the undisputed market share leader in graphics processing units (GPUs) used by businesses in AI-accelerated data centers, there's the belief that AMD shouldn't have any trouble (pardon the necessary pun) chipping away at this market share lead. AMD's Instinct series AI-accelerating chips are less-costly than Nvidia, and its innovation timeline appears to be mirroring that of Wall Street's AI darling. This is to say that AMD's chips should enjoy strong demand from cost-conscious businesses and those companies that don't want to wait to get their hands on AI-data center hardware.
If Advanced Micro Devices is ideally set up to benefit from the AI revolution, the million-dollar question becomes: Why did David Tepper sell his fund's entire stake?
One possible answer is profit-taking. Appaloosa's average security has been held for about two years and five months, as of the end of the March. Tepper's position in AMD was entered during the second quarter of 2023, so it was held for around years. During that time, AMD stock moved from below $100 per share to between $100 and $200 per share for much of the last 20 months. This was a solid opportunity for Tepper to lock in gains.
But there may be more to this selling than meets the eye.
For example, AMD's growth rate has largely disappointed Wall Street analysts and investors, relative to other AI hardware names. Though the company appears to have found its stride in the first quarter of 2025, its gross margin of 50% is underwhelming. AMD failing to wow Wall Street may have to do with its ROCm software, which is designed to optimize AI workloads, not standing out in the same way as Nvidia's CUDA platform, which has cemented its clients within its AI ecosystem.
The other concern Tepper might have with AMD is the growing likelihood of an AI bubble forming and bursting. For more than 30 years, investors have consistently overestimated the early adoption rates and utility of game-changing innovations -- and AI looks to be the next technology in line to suffer this fate. Although Advanced Micro Devices is far more than just an AI stock, a bubble-bursting event for AI would weigh heavily on AMD.
Image source: Getty Images.
On the other end of the spectrum, it's billionaire David Tepper's aggressive addition to two existing positions (as of the end of March 2024) that really stands out.
Over a four-quarter period, ended March 31, 2025, Appaloosa's billionaire chief purchased 1,840,000 shares of ride-share kingpin Uber Technologies (NYSE: UBER) and 8,532,382 shares of Lyft (NASDAQ: LYFT). This increased Tepper's stakes by 135% in Uber and 1,825% in Lyft.
The prevailing theme here is that Appaloosa's brightest investment mind isn't attempting to pick a winner in the ride-sharing space between Uber and Lyft. Rather, he's angling his fund to take advantage of a trend that's expected to grow tenfold over the next eight years. Based on estimates from Stratis Research, the global ride-sharing market is projected to grow by more than 10X, from $87.7 billion in 2025 to $918.2 billion come 2033. A 21% compound annual growth rate offers ample opportunity for both companies to thrive.
Another important distinction to be made is that Uber Technologies and Lyft have both turned the corner to recurring profitability. Despite a few potholes in its expansion, Uber has been led masterfully by CEO Dara Khosrowshahi since taking the reins in 2017. Meanwhile, David Risher tightened the belt at Lyft and vastly improved its operating cash flow since taking the reins in April 2023. Both companies appear to offer sustained double-digit growth potential.
Something else noteworthy about Uber and Lyft has been their ability to capitalize on other revenue channels beyond ride-sharing. Specifically, both are leaning into advertising opportunities associated with their ride-share programs as a way to bolster revenue and improve their operating cash flow. The nonlinearity of economic cycle tends to bode well for ad-driven businesses.
It's also worth mentioning that Uber has a bit more scale here than Lyft. On top of maintaining roughly three times as much of the ride-share market as Lyft, Uber also handles food delivery services and logistics. This diversifies its business a bit more and allows it to take advantage of long-winded periods of economic growth.
Perhaps the one knock against Tepper's strategy is that Lyft, which is Appaloosa's smaller holding of the two, looks to be the better value. Whereas an argument can be made that Uber's price-to-sales (P/S) ratio of 4 is a reflection of its dominant market share in the ride-share space, it has to be asked: Is that really worth four times the P/S ratio of an equally fast-growing Lyft? I'd argue it isn't.
But if the addressable market for ride-sharing grows by 21% on annual basis worldwide over the next eight years, both stocks are very likely to be winners, assuming they can maintain or grow their respective market share.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Uber Technologies. The Motley Fool recommends Lyft. The Motley Fool has a disclosure policy.
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