Nvidia Corp (NASDAQ:NVDA) has been flagged as priced to the point of insanity by renowned finance professor, Aswath Damodaran. Speaking on CNBC’s Closing Bell, Damodaran, often referred to as the Dean of Valuation, expressed concerns about the current valuations of the Magnificent Seven stocks, with Nvidia standing out as particularly overpriced. Damodaran stated that while Nvidia was an amazing buy at the right time, its current price of $682 is a stretch given its earnings potential and cash flows. Damodaran admitted that he may be missing some part of the picture, but maintains that the current valuation doesn’t make sense to him.
On the other hand, Damodaran believes that Apple Inc (NASDAQ:AAPL) and Tesla Inc (NASDAQ:TSLA) have the most attractive valuations among the Magnificent Seven. Despite the entire group appearing slightly overpriced, Damodaran suggests that investors who want to buy in should consider Apple and Tesla. Damodaran personally bought Tesla shares at around $180 a couple of weeks ago, and while the stock has faced pressure in recent months, he sees room for upside from the current level.
Regarding Apple, Damodaran explains that its stock performance is tied to upgrade cycles for iPhones. If upgrades are down, Apple has a bad year, but when there is a significant upgrade cycle during the year, it has a good year. Damodaran states that he believes Apple will bounce back, emphasizing that at $188, it is as good a buy as any of the other seven stocks.
In terms of stock performance, at the time of writing, Nvidia shares were up 2.77% at $701.12, Tesla shares were up 1.80% at $188.44, and Apple shares were down 0.071% at $189.19. Damodaran’s assessment provides investors with valuable insights into the current valuations of these tech giants and highlights potential opportunities for those looking to invest in the Magnificent Seven.
Frequently Asked Questions (FAQs) Related to the Above News
Who is Aswath Damodaran?
Aswath Damodaran is a renowned finance professor and expert in the field of valuation. He is often referred to as the Dean of Valuation.
What did Damodaran say about Nvidia's valuation?
Damodaran stated that Nvidia's current valuation of $682 is excessively high and doesn't align with its earnings potential and cash flows. He believes the stock is priced to the point of insanity.
Which stocks did Damodaran suggest as having attractive valuations among the Magnificent Seven?
Damodaran highlighted Apple Inc (AAPL) and Tesla Inc (TSLA) as having the most attractive valuations among the Magnificent Seven stocks.
Did Damodaran invest in Tesla?
Yes, Damodaran personally bought Tesla shares at around $180 a couple of weeks ago and sees potential for upside from the current level.
What factors does Damodaran believe influence Apple's stock performance?
Damodaran explains that Apple's stock performance is tied to upgrade cycles for iPhones. A significant upgrade cycle results in a good year for Apple, while a lack of upgrades leads to a bad year.
What are the current stock prices of Nvidia, Tesla, and Apple?
At the time of writing, Nvidia shares were priced at $701.12 (up 2.77%), Tesla shares were priced at $188.44 (up 1.80%), and Apple shares were priced at $189.19 (down 0.071%).
What does Damodaran's assessment provide for investors?
Damodaran's assessment provides valuable insights into the current valuations of tech giants like Nvidia, Tesla, and Apple. It highlights potential investment opportunities and considerations for those interested in the Magnificent Seven stocks.
Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.
