Taking a look at what billionaire investors are doing is a smart gut check for investors. By looking at trades of some of the market’s most successful investors, you can see if your strategy aligns with their moves.

Luckily, this information is available to all investors, as any entity with $100 million or more in assets must file a Form 13-F with the SEC, which is then disclosed to the public 45 days after a quarter ends.

One investor I like to follow is billionaire David Tepper, who runs Appaloosa Management. In Q2, David Tepper and Appaloosa sold 150,000 shares of Meta Platforms. That amounts to about $100 million worth of Meta stock at today’s prices.

However, Tepper didn’t let those proceeds just sit in cash because he’s scared of a potential artificial intelligence (AI) bubble. Instead, he stuck that money back into Nvidia (NVDA +2.25%). Tepper also sold some other stocks to fund this investment, as he purchased 1.45 million shares of Nvidia during Q2, which cost over $260 million at today’s prices.

That’s a huge vote of confidence for Nvidia, especially with many investors wondering if there could be an AI bubble forming. However, I think investors don’t need to be worried about it, and with some of Wall Street’s smartest money managers also backing Nvidia’s stock, I think there’s plenty of room for this giant to run.

The AI arms race is still ongoing

Nvidia makes graphics processing units (GPUs), which are general-purpose computing units that can process multiple calculations at once. This makes them suited for difficult workloads, like what artificial intelligence (AI) presents. Nvidia has been the undisputed king of AI computing equipment since the arms race began in 2023, but two other companies are challenging that authority.

AMD and Broadcom are both worthy competitors, and recent product wins with OpenAI, the makers of ChatGPT, have caused investors to wonder if Nvidia is losing its edge. However, Nvidia also announced its own deal with OpenAI, along with many others, like xAI.

The reality is, Nvidia’s technology and hardware stack are still better than the competition — it’s just a lot more expensive. With how much computing power AI hyperscalers are finding necessary to drive their ambitions, it’s no surprise that they’re looking at cheaper alternatives.

Nvidia

Today’s Change

(2.25%) $4.10

Current Price

$186.26

Still, Nvidia holds a commanding lead over the competition, and it’s unlikely that it will lose much market share to these other competitors. Even if it does, there’s still a ton of opportunity to go around.

AI data center buildouts are ramping up

With Tepper selling Meta Platforms and buying Nvidia, it’s a sign he thinks there will still be plenty of AI spending to come. This makes investing in an AI hardware provider like Nvidia a better idea than an AI hyperscaler like Meta Platforms.

Meta Platforms

Today’s Change

(0.59%) $4.36

Current Price

$738.36

In 2025, Nvidia expects global data center capital expenditures to reach $600 billion. However, by 2030, Nvidia expects this figure to rise to $3 trillion to $4 trillion. That’s huge growth, and Nvidia is set to take a huge chunk of that pie.

Nvidia CEO and cofounder Jensen Huang also stated that about $35 billion of a $50 billion data center goes toward Nvidia. So even if Nvidia can only capture 50% of the global computing market (most estimates peg Nvidia’s current market share at 90%), it will still be in fantastic shape.

Many of these monstrous announcements regarding AI spending span multiple years, so the notion that we’re suddenly entering an AI bubble isn’t correct, in my opinion. It will take several years for this spending to come to fruition, and these announcements are just that: announcements. Time will tell if OpenAI or any of its AI hyperscaler peers will convert on what they say, but if they do, Nvidia is slated to benefit. As a result, I think investors would be wise to follow in Tepper’s footsteps and scoop up shares of Nvidia.