Portfolio Restructuring: Reduction in Tech Giants
David Tepper, the founder and head of Appaloosa Management, has made significant changes to his portfolio in the first quarter of 2025. Tepper has substantially reduced his positions in technology companies Nvidia, Microsoft, and ASML. This reflects a shift away from high-growth tech stocks – a trend also seen in other hedge funds. Notably, there is a reduction in Chinese internet stocks like Alibaba, Pinduoduo, and JD.com, indicating profit-taking.
New Investments: Deutsche Bank & Co.
In contrast, Tepper has built several new positions, including:
- Deutsche Bank: By purchasing 3.75 million shares, he sends a clear signal for the European financial sector.
- L3Harris Technologies: A US defense company, accounting for about 0.75% of his portfolio.
- Broadcom: Another new entry comprising around 0.26% of the portfolio.
In total, eleven to twelve new stocks have been added to the portfolio. The specific names of these additional stocks are not always explicitly mentioned.
Market Relevance and Sector Developments
Tepper’s strategy signals a stronger diversification towards defensive sectors like finance and defense. This shift could impact market trends:
- European financial stocks gaining significance: The investment in Deutsche Bank underscores confidence in European major banks despite global uncertainties.
- Defensive sectors in focus: Defense technology is perceived as a stabilizing factor.
- Tech sector remains relevant: Despite reductions, Tepper maintains significant positions in digital platforms like Meta and Alphabet, as well as mobility services like Uber.
- Hedging through Put options: To hedge against market downturns, Tepper holds significant put positions on Apple and broad market ETFs.
David Tepper’s current investment strategy is characterized by flexibility: he takes profits from overvalued growth stocks with high volatility and strategically invests in defensive sectors and European stocks – particularly Deutsche Bank. This realignment could serve as a guide for investors in the German-speaking area.