Tepper's Quiet Portfolio Reshuffle: Exiting Healthcare, Loading Up on AI Chips and Appliances

The UnitedHealth Exit: Profit-Taking or Strategic Retreat?

Appaloosa Management, the hedge fund led by renowned investor David Tepper, made a dramatic portfolio adjustment in the third quarter of 2025. The fund dramatically reduced its position in UnitedHealth Group (NYSE: UNH), offloading approximately 2.25 million shares—representing a 92% cut to what had been a significant holding. This move came just one quarter after Tepper had aggressively accumulated nearly 2.28 million shares of the healthcare giant at what appeared to be attractive valuations in Q2.

The timing suggests Tepper capitalized on a sharp rebound. If he timed the market perfectly, buying at the Q2 lows and selling near Q3 highs, the gains could have reached approximately 29%—a respectable return over such a brief window. However, whether this represents brilliant market timing or simply taking profits after a quick rally remains open to interpretation. What’s clear is that Tepper has a long-standing pattern of cycling in and out of UnitedHealth Group shares, suggesting he views the stock through a tactical lens rather than as a long-term core holding.

The Cash Redeployment: Where Tepper Put His Money

The real story lies in where Tepper deployed the capital freed up by his UnitedHealth retreat. According to the fund’s 13F filing, Appaloosa’s major Q3 moves reveal a clear strategic tilt toward artificial intelligence and undervalued cyclical stocks.

The most eye-catching move was a 1,967% increase in Whirlpool Corporation (NYSE: WHR) shares. The home appliance manufacturer’s stock had plummeted more than 40% from its year-to-date highs, creating what Tepper apparently saw as a compelling valuation opportunity. At a forward price-to-earnings multiple of just 12, the stock looked cheap on paper—though economic headwinds add risk to consumer discretionary plays.

AI Chip Bets: The Real Strategic Vision

Beyond Whirlpool, Tepper’s most significant new allocations centered on artificial intelligence semiconductor companies. His AI-focused moves carry particular strategic weight:

Qualcomm (NASDAQ: QCOM): Appaloosa added 895,000 shares, boosting the position by 256%. The chipmaker is positioning itself aggressively in the edge AI accelerator space, with new AI200 chips designed to challenge market dominance in AI infrastructure. This purchase signals Tepper’s confidence in Qualcomm’s ability to capture meaningful share in the rapidly expanding AI hardware market.

Advanced Micro Devices (NASDAQ: AMD): Tepper initiated a fresh, substantial position in the chipmaker. AMD already ranks among the top rivals to Nvidia in AI GPU market share, with plans to expand its footprint further. The investment implies Tepper believes AMD will continue eroding Nvidia’s market dominance and capturing higher margins as AI chip demand accelerates.

The hedge fund also increased its stake in the KraneShares CSI China Internet ETF (NYSEMKT: KWEB) by 85%, adding international diversification to its AI exposure.

What This Means for Individual Investors

Tepper’s reshuffling offers potential insight into where sophisticated capital sees opportunity, though investors should proceed with caution. Simply mirroring any professional investor’s trades without aligning them to personal goals and risk tolerance is a recipe for misaligned returns.

His exit from UnitedHealth, for instance, may disappoint long-term value investors who believe the company’s fundamentals will strengthen meaningfully in 2026 and beyond. However, his increased exposure to AMD and Qualcomm aligns with a compelling thesis: as AI adoption accelerates and chip architectures diversify beyond a single market leader, secondary players with strong R&D capabilities stand to win significant market share.

The Whirlpool bet appears more speculative—attractive valuation against cyclical downsides in consumer discretionary spending. Tepper’s three-stock shift ultimately reflects confidence that AI semiconductors offer better risk-reward than established healthcare businesses or consumer appliances, even at compressed valuations.