Aswath Damodaran of New York University said that Nvidia is overpriced, even when compared to the rest of the so-called “Gig Seven.” “It was amazing buying at one point,” Damodaran told CNBC's “Closing Bell” on Tuesday. “And today's prices, I mean all the stocks look overvalued, but I think Nvidia stands out as particularly overvalued.” NVDA 1D Mountain Nvidia Nvidia is one of seven stocks that continues to rise as a group in 2024 after leading the S&P 500 in 2023. Together, the seven stocks are up about 9% over the year. But Nvidia, which leads the pack, looks particularly expensive this year after rising more than 37%. Damodaran, known as the “Dean of Valuation” for his analysis of his company, said this is overstated given its current earnings potential and cash flow. He predicts that investors have used the hype around generative AI to justify overly inflated valuations. “I think the laziness with which people attach bonuses to companies just because they see the word ‘AI’ — and you see that partly with Microsoft as well — is, I think, terrifying because at some point, reality is going to play a role,” Damodaran said. We exited and it would not meet those expectations.” Instead, Damodaran favors Apple and Tesla in the Magnificent Seven portfolio, saying they are more attractive after their recent declines. Apple shares will fall more than 1% in 2024, while Tesla shares are down 25% Earlier Tuesday, Strategas technical analyst Chris Fearon noted that Nvidia was approaching a 60% premium to its 200-day moving stock price, though he added that “historically, this has been more extreme.” — CNBC's Michael Bloom contributed reporting.
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