Should you follow Billionaire David Tepper and sell these 5 Artificial Intelligence (AI) stocks?

Billionaire David Tepper Just Slashed His Positions in These 5 Artificial Intelligence (AI) Stocks. Should You Sell Them, Too?

David Tepper, the renowned hedge fund manager, has made headlines by significantly reducing his positions in several top artificial intelligence (AI) stocks in the second quarter of 2024. Tepper’s fund, Appaloosa, has long been heavily invested in AI stocks, but recent moves show a change in sentiment. Let’s take a closer look at the top five AI cuts Tepper made in Q2:

  1. Alibaba Group Holding (NYSE: BABA) – Tepper sold 750,000 shares of Alibaba, trimming the fund’s stake by approximately 6.7%. Despite the reduction, Alibaba remains Appaloosa’s largest position, accounting for around 12.2% of the portfolio.

  2. Amazon (NASDAQ: AMZN) – Tepper reduced the fund’s stake in Amazon by 9.2%, selling 353,000 shares. Amazon remains a significant holding for Appaloosa, holding the second position in the portfolio.

  3. Microsoft (NASDAQ: MSFT) – Tepper sold more than 15.6% of the fund’s position in Microsoft, although the tech giant remains one of Appaloosa’s largest holdings.

  4. Meta Platforms (NASDAQ: META) – Despite maintaining its ranking as the fourth-largest holding in the portfolio, Tepper slashed over 15.6% of Appaloosa’s stake in Meta Platforms in Q2.

  5. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) – Tepper also sold 150,000 shares of Alphabet, decreasing the fund’s stake by 7.2%. However, Alphabet remains among the top five holdings for Appaloosa.
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While Tepper has not publicly disclosed his reasons for reducing his positions in these AI stocks, speculations can be made about his motives. It is worth noting that Tepper also increased his stakes in Adobe and ASML Holdings during the same period.

The question now arises – should other investors follow Tepper’s lead and sell these AI stocks as well? The answer may vary depending on individual investment objectives. Despite the sell-offs, companies like Alibaba, Amazon, Microsoft, Meta Platforms, and Alphabet continue to show promise in the AI space and could be attractive long-term investments for many.

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