David Tepper Sticks to China Bet While Trimming Nvidia Holdings

(Bloomberg) — Billionaire investor David Tepper held about steady in the Chinese companies that he scooped up earlier this year, even as he trimmed his stakes in Alibaba Group Holding Ltd. and US tech giants.

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While Tepper’s Appaloosa Management cut its stake in Alibaba by about 7% in the second quarter, the Chinese e-commerce giant remains the fund’s biggest position, accounting for 12% of its $6.2 billion equity portfolio, according to a 13F regulatory filing Wednesday.

Tepper also tweaked his investment in other Chinese companies, adding stakes in JD.com Inc., KE Holdings Inc. and two Chinese exchange-traded funds, while reducing positions in PDD Holdings and Baidu Inc. All told, the Chinese shares and ETFs made up 26% of the fund’s equity portfolio.

Tepper — who founded Appaloosa in 1993 — continued to slash his exposure to US tech companies, including Amazon.com, Microsoft Corp., and Meta Platforms Inc. His holdings in Nvidia Corp. fell by 84% during the quarter to $85 million, or 1.4% of the portfolio.

Tepper, along with Scion Asset Management’s Michael Burry, has become one of the few prominent China stock bulls among hedge fund investors. He loaded up on Chinese stocks in the first quarter – more than doubling his stake in Alibaba — as an equity rout prompted state-backed funds to step up purchases to prop up the market.

Read: Michael Burry Raises Alibaba Stake, Cuts Stock Portfolio in Half

Since then, Chinese stocks have been struggling to gain momentum as the years-long housing slump sapped consumer confidence. The MSIC China Index gained just 0.4% this year as one of the biggest laggards in the global market, trailing the S&P 500’s 14% return.

Like Tepper, Burry — who rose to fame for his bet against the US housing market in 2008 — stuck to his bullish bets on China, even as he slashed his overall equity portfolio in half in the second quarter. Burry boosted his stake in Alibaba and Baidu last quarter, while paring back on JD.com. The three Chinese companies made up 46% of his $52 million equity portfolio.

Alibaba and JD.com will report latest quarterly earnings on Thursday. Alibaba has returned 4.8% this year, including dividend, while JD.com lost 7.7%.

–With assistance from Yiqin Shen.