Billionaire investor David Tepper‘s Appaloosa Management reduced its stake in Alibaba Group Holding Ltd BABA by 5% in the third quarter, despite his recent public enthusiasm for Chinese investments, according to regulatory filings released Thursday.

What Happened: The reduction comes just months after Tepper declared that he would buy “everything” China-related amid Beijing’s stimulus efforts. Despite the trim, Alibaba remains Appaloosa’s largest holding, representing 15.75% of its $6.7 billion equity portfolio.

The hedge fund’s third-quarter moves reveal a complex strategy toward Chinese investments. While reducing positions in the iShares China Large-Cap ETF FXI, KraneShares CSI China Internet ETF KWEB, and Baidu Inc BIDU, Tepper more than doubled his stake in PDD Holdings Inc PDD and increased positions in JD.Com Inc JD and KE Holdings Inc BEKE.

The filing also revealed significant reductions in major U.S. technology holdings. Appaloosa sold 275,000 shares of Amazon.com Inc AMZN, representing an 8.59% reduction while cutting its Microsoft Corp MSFT position by 211,356 shares, or 21.89%. The fund also reduced its stake in Meta Platforms Inc META by 310,000 shares, a 49.6% decrease, and trimmed its position in Alphabet Inc Class C GOOG.

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Why It Matters: Overall, Tepper’s exposure to Chinese stocks and ETFs increased to 38% of his equity portfolio in the third quarter, up from 26% in the previous quarter. This positions him, alongside Scion Asset Management‘s Michael Burry, as one of the few prominent hedge fund managers maintaining significant Chinese market exposure.

These portfolio adjustments come as Chinese stocks face headwinds from disappointing fiscal policies and persistent economic challenges, including weak consumer spending and an unstable property market. Market observers note that geopolitical tensions and potential tariff increases add further uncertainty to the investment landscape.

The details of these transactions were disclosed in a Form 13F filing, a quarterly report required by the Securities and Exchange Commission for institutional investment managers overseeing more than $100 million in qualifying securities.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.