Billionaires David Tepper and Michael Platt Sold Nvidia Shares and Bought This AI Stock That's Climbed 40,000% Since its IPO.

There are many paths to a billion-dollar portfolio, meaning billionaires don't always agree when it comes to investment opportunities. Even if it's clear that the area of artificial intelligence (AI) has a bright future, billionaire hedge fund managers may choose different paths to an AI win. One may pile into Nvidia (NASDAQ: NVDA), for example, while another sells shares of this AI chip giant.

But, from time to time, these investing experts see eye to eye and make similar moves. And this is exactly what happened in the fourth quarter of last year. Billionaires David Tepper of Appaloosa Management and Michael Platt of Bluecrest Capital Management each sold shares of Nvidia and bought an AI stock that's soared 40,000% since its initial public offering. Let's check out the details.

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A look at 13F filings

So, first, a quick note on how we know about these billionaires' moves. On a quarterly basis, managers of more than $100 million in stocks must report their activity to the Securities and Exchange Commission on Form 13F. These forms are available for the public to see, so we may get a glimpse into the latest moves of these investing experts.

Tepper and Platt, like many other billionaires, have been investing in AI stocks; Tepper may be the most aggressive here, though, as his top five holdings, from Alibaba to Meta Platforms, are heavily involved in AI. Platt's biggest stock positions are in finance and energy. Both billionaires made two similar moves in the latest quarter, however...

• Tepper, who oversees $6.9 billion, cut his position in Nvidia by 10%, and it now makes up 4.6% of his portfolio. He's held the stock since the first quarter of 2023.
• Platt, who manages $3.3 billion, slashed Nvidia by 96%, and the stock now makes up only 0.2% of his portfolio. He's held Nvidia shares since the second quarter of last year.
• Tepper increased his position in Micron Technology (NASDAQ: MU) by 200%, and it now accounts for 6.2% of his portfolio. He's held the stock since the second quarter of 2023.
• Platt opened a new position in Micron, and it represents about 0.1% of his portfolio.

A better growth buy

As always with 13F filings, we don't know the exact reason behind the investors' moves. But these decisions by Tepper and Platt suggest the billionaires believe Micron will deliver growth as the next stages of the AI story unfold -- and potentially represent a better growth buy than Nvidia. It's also important to note that these moves took place a few months ago, and the billionaires' views or strategies may have changed in more recent times.

Still, it's fair to say that Micron, a leader in the AI memory and storage space, could deliver significant earnings growth in the coming quarters. Micron's products may be popular among AI customers during this next stage of AI growth, as AI is more regularly applied to real-world problems. To make this happen, models go through inference or a "thinking" process that allows them to develop answers and solutions. And to do this, they will need a lot of memory.

Micron's record earnings

In the most recent period, Micron offered us a preview of this trend, with revenue reaching record levels, and the company expects more records in the next reporting period. Micron says AI demand is driving this momentum.

So, should you follow billionaires Tepper and Platt and opt for Micron shares over Nvidia? This depends on your investment strategy and current AI holdings. If you've already held Nvidia stock for a while and are looking for another high-potential stock, you might favor buying Micron right now. The stock trades at only 11x forward earnings estimates, compared with 20x or higher for many other AI stocks.

That said, like the billionaires, you might want to hold onto some Nvidia shares as the AI giant is likely to keep delivering significant growth as this AI boom marches on.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms, Micron Technology, and Nvidia. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.