Outside of finance and sports ownership, Tepper’s career includes a series of formative positions that shaped his reputation and investment philosophy. After earning his economics degree, he worked as a credit analyst at Equibank in Pittsburgh before enrolling at Carnegie Mellon. Post-MBA, he joined Republic Steel’s treasury department in Ohio and then moved to Keystone Mutual Funds in Boston. In 1985, Goldman Sachs recruited him for its newly formed high-yield credit group in New York City. Tepper quickly rose to head trader within six months, playing a crucial role in the firm’s recovery after the 1987 stock market crash by purchasing bonds from weakened financial institutions. Known for his blunt market commentary, he advised against fear-driven investment decisions during economic turbulence, famously dismissing extreme market predictions and championing the adaptability of markets and people alike.
Appaloosa Management, founded by Tepper in early 1993 after leaving Goldman Sachs, has become synonymous with high-stakes investing in distressed companies and volatile markets. Based initially in Chatham, New Jersey, the firm was established as an employee-owned investment management company with a sharp focus on distressed debt. From its inception, Appaloosa Management has specialized in investing across public equity and fixed income markets on a global scale. The firm built a reputation for its bold, contrarian investment strategy, particularly in volatile and high-risk sectors.
Appaloosa Management quickly gained recognition, generating a 61% return in 2001 through distressed bond investments, and in 2005, pivoted to lucrative opportunities in S&P stocks. Tepper’s hedge fund became known for profiting from “dicier” companies, with notable gains from MCI, Mirant, Conseco, and Marconi. In 2009, Appaloosa made about $7 billion by purchasing distressed financial stocks like Bank of America at just $3 per share during the market crash, with $4 billion going directly to Tepper’s personal wealth, making him the top-earning hedge fund manager that year.
Throughout the 1990s, Appaloosa Management earned recognition as a niche junk bond investment boutique, distinguishing itself by targeting undervalued, distressed corporate debt that other investors tended to avoid. As the hedge fund industry evolved in the 2000s, so did Appaloosa’s role and reputation, becoming widely regarded as one of the premier hedge funds in the world, known for its aggressive, high-reward investment tactics. Its core strategy continued to focus on distressed securities, but it also expanded its portfolio to include opportunities in equities and other financial instruments, consistently generating strong returns through bold market bets.
As of its most recent 13F filing for the fourth quarter of 2024, Appaloosa Management’s top ten holdings account for 66.75% of this portfolio, which reflects the firm’s high-conviction, opportunistic investment strategy, a hallmark of David Tepper’s approach.
We searched through Appaloosa Management’s Q4 2024 13F filings to identify the top stocks in its portfolio. The resultant stocks are then compiled in the ascending order of the fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included hedge fund sentiment regarding each stock using data from 1009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a customer using the company’s e-commerce platform whilst shopping online.
PDD Holdings Inc. (NASDAQ:PDD), the parent company of Pinduoduo and Temu, delivered a mixed yet robust set of results for the fourth quarter of 2024. The company reported earnings per share of RMB 20.15, topping the consensus estimate of RMB 19.84, but revenue of RMB 110.6 billion fell short of the expected RMB 115.15 billion, prompting a 3.44% decline in premarket trading. Management emphasized that this shortfall reflects its deliberate prioritization of long‑term growth over short‑term financial targets. To that end, PDD continues to deepen its merchant ecosystem by expanding logistics support in remote regions, investing in supply‑chain infrastructure, and raising product quality standards to bolster customer satisfaction and retention.
For the full year 2024, PDD Holdings Inc. (NASDAQ:PDD) posted remarkable top‑line growth, with revenue climbing 59% year‑over‑year to RMB 393.8 billion. The company achieved a 24.06% gross profit margin and ended the year with cash and equivalents of RMB 331.6 billion, underscoring its strong balance sheet. Fourth‐quarter operating profit reached RMB 28 billion, maintaining a 24% margin, and full‐year non‑GAAP net income was RMB 122.3 billion. These results reflect PDD’s ability to leverage scale, technology, and an increasingly diversified merchant base to drive sustainable profitability even as it invests aggressively in future growth initiatives.
As Appaloosa Management held a stake of over $519 million in PDD Holdings Inc. (NASDAQ:PDD), it stands third in Billionaire David Tepper’s top 10 stock picks.
Looking ahead, PDD Holdings Inc. (NASDAQ:PDD) aims to capitalize on its financial strength and expansive user base to accelerate international expansion, particularly through its Temu platform, while continuing to enhance service quality and logistics efficiency at home. The company plans to deploy advanced data analytics and AI tools to optimize inventory management and personalize the shopping experience, further differentiating its offerings in competitive markets. With a clear strategic focus on ecosystem development, merchant empowerment, and technological innovation, PDD Holdings is well-positioned to navigate the evolving global e‑commerce landscape and sustain its leadership in the years to come.
GreenWood Investors stated the following regarding PDD Holdings Inc. (NASDAQ:PDD) in its Q4 2024 investor letter:
“Aside from transitory foreign exchange translation losses (as opposed to trading losses), the two other notable detractors from our portfolio were MEI Pharma and PDD Holdings Inc. (NASDAQ:PDD) in 2024.
Overall, PDD ranks 3rd on our list of billionaire David Tepper’s top stock picks. While we acknowledge the potential of these stock picks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PDD but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.