David Tepper isn't turning his back on China. He's just getting a lot more particular about what he owns there.

Appaloosa Management's latest 13F filing shows the billionaire investor trimmed his stake in Alibaba Group Holding Ltd (BABA) by roughly 12% during the second quarter. More notably, he completely exited positions in e-commerce rivals JD.com, Inc. (JD) and PDD Holdings Inc. (PDD), and also sold out of the KraneShares CSI China Internet ETF (KWEB). That last move is telling: it removes a broad, basket-style way to play Chinese internet stocks.

For someone long considered one of Wall Street's most vocal China bulls, these moves might look like a retreat. But the filing tells a more nuanced story. Tepper isn't abandoning the market; he's narrowing his focus. Instead of spreading capital across the sector, he's concentrating it in fewer names he seems more comfortable backing.

One name stands out: Baidu, Inc. (BIDU). Appaloosa increased its Baidu stake by about 14% in the quarter, making it one of the few China-related positions to grow. The filing doesn't explain why Tepper prefers Baidu over other Chinese tech companies—13F forms only list holdings, not the thinking behind them. But the pattern is clear: bigger Baidu position, goodbye to JD, PDD, and KWEB. That suggests Appaloosa is making stock-specific calls rather than a blanket bet on China's equity market.

It's worth remembering that 13F filings are just a snapshot as of June 30, 2026. They don't capture any moves Appaloosa made after the quarter closed. So this is a look at Tepper's thinking at a specific moment, not necessarily his current portfolio.

The reshuffling also made the fund more concentrated overall. Appaloosa's disclosed holdings dropped from 31 to 27, while the portfolio's reported value jumped to about $7.7 billion from $5.9 billion. That's a significant increase in both value and focus, suggesting Tepper is putting more money behind fewer ideas.

So what should investors watch next? Tepper's China exposure hasn't vanished—it's just more targeted. Future filings will show whether he keeps consolidating around a handful of Chinese companies or rebuilds broader exposure if sentiment toward the country's market improves. For now, the message seems to be that stock selection, not a sweeping view on China, is driving his decisions.