- NVDA
- CRWV
- META
As the founder of Appaloosa Management, David Tepper built his reputation through a keen eye for distressed assets, including debt instruments trading at steep discounts, and deep-value stocks that most other investors overlooked amid temporary turmoil.
Tepper’s willingness to embrace situations that others flee has helped him produce outsized returns over the long run. This makes his latest combination of bets between CoreWeave (NASDAQ: CRWV) and Meta Platforms (NASDAQ: META) particularly noteworthy for investors tracking the artificial intelligence (AI) infrastructure supercycle.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
The rise of neoclouds
Recent 13F filings show that Appaloosa initiated a position in CoreWeave stock during the second quarter, acquiring 1,078,248 shares. CoreWeave operates as a neocloud provider, delivering high-performance GPU capacity tailored to AI workloads. In an environment where hyperscalers are struggling to meet explosive AI-driven demand for training and inference deployments, neoclouds like CoreWeave bridge the gap by offering dedicated, scalable compute infrastructure optimized for Nvidia hardware and adjacent systems.
During the second quarter, CoreWeave’s backlog grew by more than 246% year over year to $104 billion. Of note, this figure does not include new commitments of $25 billion signed shortly after the quarter ended. CoreWeave’s customers include frontier AI labs, hyperscalers, and an expanding roster of enterprises. Revenue more than doubled year over year, reflecting the pace of rapid capacity deployment.
With that said, the company’s balance sheet reveals a potential blemish that has left some on Wall Street uneasy. CoreWeave’s total debt — including operating leases — stands north of $50 billion.
This capital from its debt sales is being used to finance the capital expenditures of its aggressive data center build-out. However, the company’s leverage profile raises questions about possible refinancing needs in a higher-interest-rate environment. The combination of heavy borrowing and pressures to free cash flow has some investors concerned about the company’s execution risks.
Why Tepper’s Meta position looks interesting
During the second quarter, Appaloosa also increased its stake in Meta Platforms by 55%, adding 238,500 shares. This move looks particularly interesting because Meta is reportedly exploring the idea of leasing some of its excess AI compute capacity to third parties. This strategy could place the social media giant and hyperscaler in direct competition with neocloud operators such as CoreWeave.
