Nvidia And Tesla Valuation Look 'Most Irrational', Says Valuation Guru Aswath Damodaran: 'Does Not Hold Up To Scrutiny'

Benzinga

Aswath Damodaran said Nvidia and Tesla are the most irrationally valued major tech stocks, arguing Nvidia’s $5T valuation assumes impossible margins and revenue. He called Tesla’s story “incoherent” and warned the Magnificent 10 leave investors exposed in any correction.

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00:00It's Benzinga, bringing Wall Street to Main Street.

00:02Asfak Damodaran warned that NVIDIA and Tesla are the most irrationally valued major tech

00:07companies in the market. Speaking on the Professor G-Market's podcast on November 4th,

00:12Damodaran said that NVIDIA's more than $5 trillion valuation is based on math that

00:17does not hold up to scrutiny. The NYU Stern finance professor, widely known as the Dean of

00:23Valuation, said NVIDIA's valuation assumes perpetual 80% margins and trillion-dollar revenues,

00:28expectations he called implausible and unsupportable. He added that Tesla's

00:33valuation suffers from fundamental incoherence because the company lacks a clear narrative

00:38about its future. He said the Magnificent 10 offer no place to hide in a correction because they make

00:44up about 40% of the S&P 500's market cap. He identified Alphabet and Amazon as the least

00:50overvalued and said he has begun moving portions of his portfolio into cash and collectibles.

00:56Tesla shares traded slightly lower in pre-market on Tuesday after closing and remain up 7.81%

01:02year-to-date. For all things money, visit Benzinga.com.

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