In Appaloosa Management’s latest 13F filing, David Tepper reduced his Oracle position significantly after holding shares since late 2023. The hedge fund exited nearly all of its remaining stake in early 2025, locking in gains following a 45% rally in the twelve months preceding his final sale. Tepper initially increased his allocation when Oracle’s cloud infrastructure growth appeared undervalued by the market, but opted to book profits once the shares approached their 2023 highs.

Oracle’s shares surged over 60% in 2024, propelled by a $300 billion multi-year contract to supply AI compute capacity to OpenAI and a series of quarterly beats in cloud revenue. In the third quarter alone, cloud infrastructure revenue grew 38% year-over-year, lifting overall revenue to $14.5 billion and net income by 22% to $4.1 billion. These results pushed Oracle’s market capitalization toward the $1 trillion threshold, reflecting investor enthusiasm for its expanding data center footprint.

Despite strong top-line momentum, Oracle’s aggressive investment in data center build-outs has increased its consolidated debt by 18% year-to-date, raising concerns about leverage. The company has committed over $25 billion in capital expenditures through 2027 to support GPU installations, and is highly exposed to OpenAI’s ability to meet its compute contracts. Any delay or scaling back of deployments could weigh on free cash flow, which Oracle projects will grow just 5% annually over the next two years.