Why Does David Tepper Believe Chinese Equities Are More Attractive Than NVIDIA's Future?

Billionaire investor David Tepper has expressed his indecision about whether to buy more NVIDIA shares and questioned the chipmaker's growth potential. Tepper said in an interview that he had sold a lot of his NVIDIA holdings because he felt the stock price was overvalued and would eventually decline. He sold 84% of his shares in the second quarter, and by the end of June, his holdings had dropped to about $85 million.

NVIDIA's stock is down 4.35% from a month ago but is up 149.4% year-to-date. He questioned whether the stock has enough power for the growth and whether the next generation models take their chips. He added that the stock looks great for 2024 and 2025, but he doesn't know about 2026. Tepper founded Appaloosa Management in 1993.

NVIDIA currently has a market value of $3 trillion but is still 12% lower than its historical high in June. Tepper concluded, not my preferred vehicle versus other things that I have more confidence in.

Instead, Tepper suggested investing in everything related to China. He attributed his big bet on Chinese assets to the country's massive stimulus measures introduced this week. In an interview on Thursday, he said, I thought that what the Fed did last week would lead to China easing, and I didn't know that they were going to bring out the big guns like they did.

In the second quarter of this year, his hedge fund held most of the shares of Chinese companies acquired earlier this year, although positions in Alibaba Group (BABA.US) and U.S. tech giants were reduced. Now, after China promised to support fiscal spending, stabilize the real estate industry, and intensify efforts to boost economic growth, he has started buying Chinese stocks again, including Alibaba and Baidu (BIDU.US).

He said, We got a little bit longer, more Chinese stocks. He stated that even after this week's stock price surge, Chinese stocks are still very undervalued, which is one of the reasons he is buying Chinese stocks.