Hedge fund tycoon Tepper: Selling NVIDIA, buying Chinese stocks
Billionaire investor David Tepper has stated that he has sold a large amount of NVIDIA stock due to its high price and lack of growth momentum. He has recommended investing in Chinese stocks, believing that China's recent large-scale stimulus measures will drive economic growth. Despite NVIDIA's 149.4% increase this year, Tepper remains cautious about its future and believes that Chinese stocks are still undervalued and worth investing in
Billionaire investor David Tepper expressed hesitation about buying more shares of NVIDIA (NVDA.US), questioning whether the chip manufacturer has enough growth potential. In an interview, Tepper stated that he has sold a "significant amount" of his NVIDIA shares because he believes the stock price appears too high and will eventually decline. He sold 84% of his holdings in the second quarter, reducing his stake to around $85 million by the end of June.
NVIDIA has dropped by 4.35% compared to a month ago, but has risen by 149.4% year-to-date. Tepper questioned whether the stock has "enough growth power" and whether "the next generation models can replace their chips." He added that the stock looks good in 2024 and 2025, but he "doesn't know" about 2026. Tepper founded Appaloosa Management in 1993.
NVIDIA's current market value is $3 trillion, but is still 12% below its historical high in June. Tepper's conclusion is: "Compared to other stocks I have more confidence in, NVIDIA is not my top choice."
In contrast, Tepper recommended investing in "buying everything" related to China. He attributed his significant bet on Chinese assets to the large-scale stimulus measures introduced by China this week. In an interview on Thursday, he said, "I thought the Fed's actions last week would lead to China easing monetary policy, but I didn't expect their stimulus to be this significant."
In the second quarter of this year, his hedge fund held most of the shares of Chinese companies acquired earlier this year, despite reducing holdings in Alibaba Group (BABA.US) and U.S. tech giants. Now, after China pledged to support fiscal spending, stabilize the real estate industry, and intensify efforts to boost economic growth, he has started buying Chinese stocks including Alibaba and Baidu (BIDU.US).
He said, "We hold Chinese stocks for a longer period of time and in larger quantities." He mentioned that even after the surge in stock prices this week, the valuation of Chinese stocks remains low, which is one of the reasons he is buying Chinese stocks