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In this deep-dive interview, NYU Finance Professor Aswath Damodaran, the "Dean of Valuation," assesses the current state of the U.S. stock market, describing the S&P 500 as richly priced but stopping short of calling it a bubble. He explores the "big market delusion" inherent in the AI revolution, distinguishing between the profitable "architecture" of chips and the highly speculative future of Large Language Models. Damodaran provides a candid look at his own portfolio, explaining why he recently exited his Nvidia position after a massive run while continuing to hold Microsoft. He offers a sharp critique of "lazy" valuation metrics like the P/E ratio, arguing that investors must instead focus on cash flows and the shift toward buybacks to understand market resilience . Furthermore, he warns that while AI will benefit consumers, the resulting competition may actually lead to lower profit margins for most companies collectively. Finally, the Professor touches on the role of gold as something that is viewed as an "insurance policy" in a world where institutional trust is rapidly eroding. Recorded on January 15, 2026.
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Aswath Damodaran’s Website https://pages.stern.nyu.edu/~adamodar/
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