No one amasses a multibillion-dollar fortune by making dumb decisions. To make that kind of money, you almost certainly need astuteness and insight that goes beyond the ordinary. That seems to be the case with David Tepper.
Early in his career, Tepper led junk bond trading for Goldman Sachs. He started a hedge fund, Appaloosa Management, in 1993. The rest is history. Tepper's net worth today stands at $23.7 billion.
Google parent Alphabet (GOOG +1.49%) (GOOGL +1.50%) and Meta Platforms (META 1.29%) rank among Appaloosa's largest holdings. But does Tepper know something about them that Wall Street doesn't?
Image source: Getty Images.
Tepper's big Q2 moves with Alphabet and Meta
Tepper first bought Alphabet's class C shares (the tech giant has three share classes, but only the class A and class C shares trade on public stock exchanges) in 2015. His hedge fund has owned the stock ever since.
However, the billionaire doesn't seem to be as enamored with Alphabet as he used to be. Appaloosa's 13F filing for the second quarter of 2025 revealed that Tepper sold 510,000 shares, reducing the hedge fund's stake in Alphabet by around 25%.
Tepper's relationship with Meta goes back even farther. He initiated a new position in the stock (then known as Facebook) in 2014, but sold all the shares in the same year. In 2016, Tepper bought Meta again. This time, he held on.
But Appaloosa sold 150,000 shares of Meta in Q2. This move slashed the hedge fund's stake in the social media giant by more than 27%.
Wall Street has a different take on these stocks
How do Tepper's sales of Alphabet and Meta align with Wall Street's take on the two "Magnificent Seven" stocks? Not very well.
NASDAQ: GOOGL
Key Data Points
Of the 66 analysts surveyed by LSEG in August, 54 rated Alphabet as a "buy" or "strong buy," with the remaining 12 recommending holding the stock. An overwhelming majority (58) of the 67 analysts surveyed by LSEG rated Meta as a "buy" or "strong buy." All but one of the other analysts recommended holding the stock, with one lone outlier giving it a "sell" rating.
Granted, the average 12-month price target for Alphabet is only a few percentage points higher than the current share price. However, analysts project that Meta's stock could jump roughly 15% over the next year.
Why is there such a disconnect between Tepper's and Wall Street's views on Alphabet and Meta? It isn't because the billionaire hedge fund manager has soured on AI stocks. Tepper bought additional shares of Amazon (AMZN +1.04%) and Nvidia (NVDA 4.43%), among others, in Q2.
NASDAQ: META
Key Data Points
I doubt that valuation was a major concern for Tepper, either. Both Alphabet's and Meta's share prices tumbled in Q2 to levels lower than the first quarter, when he bought additional shares of both stocks. The reason for Tepper's sales of these two stocks is puzzling.
Don't follow the billionaire on this one
Does Tepper know something about these AI stocks that analysts don't? Maybe, but I don't believe he does. Either way, I agree with the consensus on Wall Street that both Alphabet and Meta are good picks for investors.
Google Cloud remains the fastest-growing of the three biggest cloud service providers. Google Search and YouTube are booming. Generative AI is proving to be a help for Google rather than a hindrance. Alphabet's Waymo unit has a huge opportunity as the robotaxi market takes off.
Meta's family of social media apps, including Facebook, Messenger, Instagram, and WhatsApp, continues to attract big bucks from advertisers. The company could enjoy tremendous growth as the adoption of AI glasses increases. Meta even offers a lottery ticket of sorts with its investment in AI superintelligence.
I think Tepper is brilliant and one of the best hedge fund managers ever. In the case of Alphabet and Meta, though, I suspect the best move for long-term investors is to not follow in the billionaire's footsteps.
