Valuation expert Aswath Damodaran warns Nvidia's $5 trillion market cap is unsustainable, arguing that AI must replace human labor to justify the massive capital expenditure currently fueling the chipmaker's growth.
Damodaran warns Nvidia is priced as the 'greatest company ever' and has sold his position, citing stretched valuation despite strong fundamentals.
Apple is mentioned as the second-largest company with 20% Polymarket odds of being the world's largest in 2026, with no direct valuation opinion.
NYU Stern professor Aswath Damodaran has fully exited his position in Nvidia, warning that the chipmaker is priced as the 'greatest company ever.' While Nvidia continues to report triple-digit revenue growth, Damodaran argues that the AI sector requires an unrealistic $8 trillion to $10 trillion in annual revenue to justify current infrastructure spending levels.
Damodaran believes Nvidia is priced as the 'greatest company ever' and that the current valuation relies on an unrealistic expectation of future AI revenue growth.
He warns that for AI to generate the revenue needed to justify current infrastructure costs, it must replace human labor, which could ultimately destroy the consumer base that purchases the goods and services produced by AI.