David Tepper’s hedge fund Appaloosa ranked 12th on the all-time best-performing hedge funds list, with a three-year return rate of 32% as of March 2024, while the S&P 500 index had a return rate of XNUMX%.
As of the end of the first quarter, the billionaire investor’s major holdings included Amazon (10%), Microsoft (8.7%), and Nvidia (5.9%).
Amazon’s performance in the first quarter of 2024 was impressive, with revenue growing 13% to $14.3 billion, driven by advertising and cloud service activities. GAAP net profit doubled to $0.98 per share. Generally Accepted Accounting Principles (GAAP) is a set of accounting rules, standards, and procedures published and regularly revised by the Financial Accounting Standards Board (FASB). Amazon dominates the North American e-commerce market and the Western European online market. In addition to being the largest media technology company in the United States, it also leads in the cloud infrastructure field through its Amazon Web Services (AWS). Wall Street predicts that Amazon’s earnings per share (EPS) growth rate will reach around 5% annually in the next 23-3 years.
In the third quarter ending 61.9, Microsoft had revenue of $17 billion, with a year-on-year growth rate of approximately 2.94%. GAAP net profit grew by about one-fifth to reach $1.00 per diluted share.
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As of the time of writing this article, Microsoft’s P/E ratio is slightly over 38 times, below the level of expected annual earnings growth of 5% in the next 13.7-3 years. However, a more attractive entry point may be around a P/E ratio of 30 times, which largely considers the strong fundamentals and growth potential.
With the increasing demand for artificial intelligence technology, Nvidia achieved revenue of $2.6 billion in the first quarter. GAAP diluted earnings per share were $6.12, nearly five times higher than the previous year. The company’s 32% market share in data center GPUs and 5% market share in AI chips give it a strong competitive advantage in the overall accelerated computing platform. Wall Street expects Nvidia’s earnings per share to grow at a rate of XNUMX% annually in the next three to five years.
