This Billionaire Was Recently Loading Up on "Magnificent Seven" Stocks

Appaloosa’s David Tepper added to positions in Amazon, Meta, Alphabet, and Nvidia while trimming memory stocks, signaling confidence in megacap AI infrastructure and cloud growth. The article cites AWS revenue up 37% YoY in Q2 (fastest growth in 4.5 years), Meta revenue growth of 28% in Q2, Alphabet’s AI/TPU-driven Google Cloud advantages, and Nvidia trading at a cheaper 17.5x forward P/E (fiscal 2028 estimates) despite continued rapid growth. Overall, the piece is bullish on AI-led business momentum and valuation support for these names, but it’s not a new earnings/guidance catalyst expected to move the broader market.

Analysis

This is more a positioning confirmation than a fresh fundamental signal: capital is still gravitating toward platforms that can turn AI into either lower unit costs or better monetization, rather than pure infrastructure spenders. AMZN and GOOGL have the cleanest second-order upside because AI improves their own economics first, then compounds through pricing power and share gains; META is the highest operating-leverage expression if ad conversion stays elevated.

Over the next 1-3 months, the trade is less about the headline and more about whether earnings can justify the incremental capex. If revenue growth does not stay ahead of depreciation and spend, the market will compress multiples quickly in NVDA and META first, because both are already priced for extended outperformance. A spillover risk is that smaller memory and AI-hardware names get de-rated as hyperscaler wallet share concentrates in a few winners.

The contrarian view is that “cheap” on distant EPS can stay cheap if growth normalizes. NVDA has the most valuation fragility because the market is already underwriting years of scarcity economics, while GOOGL has the strongest downside support via TPU economics and core cash generation. Regulatory noise matters most for GOOGL/META, but unless it alters ad/search distribution, it is more of a multiple cap than an immediate earnings threat.

Key Decisions for Investors

• Accumulate AMZN, GOOGL, and META on 5-10% pullbacks over the next 2 weeks; hold for 3-6 months. Best risk/reward is AMZN, where AI plus ads can still drive margin expansion faster than consensus expects.
• Initiate a 3-6 month pair trade: long GOOGL / short NVDA. The thesis is that software-plus-TPU monetization is less fragile than a premium hardware multiple if AI spending rotates from scarcity to efficiency.
• Use NVDA rallies to trim or hedge existing exposure with QQQ puts or a collar into the next earnings print. Falsify the bearish view if NVDA sustains top-line growth and gross margin expansion simultaneously.
• Treat META as a tactical long only if ad pricing remains strong; otherwise it is the quickest to re-rate lower on any signal that AI capex is outrunning monetization.