David Tepper's Appaloosa Management raised its Amazon stake by 15.8% last quarter, pushing the stock to 16% of the fund's nearly $7.5 billion portfolio. The move came alongside a pullback from AI hardware names and a bigger bet on hyperscalers, as Amazon shares climbed on strong AWS growth.
Appaloosa Management added 680,000 Amazon shares during the quarter ending June 30, a 15.8% increase that left the stock at 16% of David Tepper's nearly $7.5 billion stock portfolio, according to Appaloosa's latest 13-F filing with the SEC. Tepper built his estimated $23.7 billion fortune over a 40-plus-year career, first in distressed debt and now mainly in large-cap tech stocks.
Appaloosa rotates from AI hardware into hyperscalers
During the same quarter, Appaloosa cut its Micron position by 41.4% and exited its Sandisk stake entirely. The fund also raised its Alphabet holding by 6.7% and its Meta Platforms stake by 54.6%. Even so, Meta accounts for only 5.1% of the overall portfolio, and Amazon seems to remain Tepper's highest-conviction bet on the AI growth trend.
AWS growth and a bigger capex budget
Amazon shares have kept climbing since the end of Q2, most notably after the company's July 30 earnings report. AWS reported 37% revenue growth for the quarter, beating forecasts, and CEO Andy Jassy said Amazon would raise its 2026 capital expenditure budget from $200 billion to $220 billion.
Amazon shares trade at $258.63, giving the company a market cap of $2.8 trillion. At 22 times earnings estimates, the stock trades at a slight premium to Alphabet, Meta and Microsoft, which sit at forward multiples in the high teens and low 20s.
A bet tied to the AI trade
It is unclear whether Tepper is still buying or selling, since Appaloosa's next SEC filing isn't due until the current quarter ends. The fund's continued conviction rests on AWS's infrastructure build-out translating into further earnings growth, which could lift the shares further. But Amazon's minority stake in AI start-up Anthropic further exposes it to the AI trend, and this stock could get hammered back if the AI bubble were to burst.
Source: The Motley Fool
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