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Aswath Damodaran, a distinguished finance professor at NYU Stern and widely recognized as the "Dean of Valuation," has voiced significant apprehension regarding the current market valuations of prominent technology companies. He has specifically identified Nvidia Corp. and Tesla Inc. as having the most irrational valuations in the contemporary market landscape.

Speaking on the Prof G Markets podcast on November 14, Damodaran conveyed profound skepticism concerning the present pricing of Nvidia, a leading artificial intelligence chipmaker whose market capitalization surpassed $5 trillion in 2025. According to Damodaran, the underlying financial projections supporting the chipmaker's stock price simply do not withstand rigorous examination. He elaborated that the expectations embedded in Nvidia's stock price, such as achieving perpetually high gross margins of 80% on revenues exceeding a trillion dollars, are unrealistic and unsustainable.

Damodaran categorized Tesla within the same "irrational" bracket, albeit for distinct reasons. While Nvidia's valuation is deemed to suffer from excessive mathematical assumptions, Damodaran contended that Tesla's core issue lies in a lack of fundamental coherence. He expressed uncertainty regarding Tesla's identity as a company, stating that he is unsure of its future narrative, implying that even the company itself might not have a clear long-term vision.

The professor's pessimistic outlook was not confined to these individual stocks but encompassed a broader warning about the "Magnificent 10" tech stocks. These companies collectively constitute approximately 40% of the S&P 500's total market capitalization. Damodaran cautioned that in the event of a market correction, there would be "no place to hide," suggesting that a substantial downturn in these leading companies would trigger ripple effects across the entire market, adversely affecting index funds and passive investors.

Despite his critical assessment of market leaders, Damodaran singled out Alphabet Inc. and Amazon.com Inc. as the "least overvalued" among the large technology firms. He proposed that companies such as Amazon possess clearer strategies for monetizing efficiency, rather than solely relying on the prevailing "AI boom" narrative. Reflecting his concerns, Damodaran revealed that, for the first time in his professional career, he is reallocating portions of his personal investment portfolio into cash and even contemplating investments in collectibles, acknowledging this as an uncharacteristic move for a value investor. He concluded by asserting the difficulty of finding any undervalued major tech stocks, implying that current market prices offer no genuine bargains.

Unlock the Power of Long-Term Investing: Discover TSMC's Decade of Unprecedented Financial Expansion

TSMC's Enduring Market Position and Role in Global Technology

Taiwan Semiconductor Manufacturing Co. (TSMC) stands as a prominent global entity in the semiconductor manufacturing sector. As a multinational foundry, it holds the distinction of being the world's leading contract producer of integrated circuits, a crucial component in nearly all modern electronic devices. Its foundational role in the technology supply chain underscores its importance to various industries worldwide.

Anticipating Financial Disclosures: Forthcoming Earnings Insights

TSMC is scheduled to unveil its financial results for the fourth quarter of 2025 on January 15th. Industry analysts are projecting a robust performance, with expectations of a significant increase in earnings per share (EPS) to $2.73, marking a notable rise from $2.24 in the corresponding period of the previous year. Furthermore, quarterly revenues are forecast to reach an impressive $32.60 billion, up from $26.88 billion in the prior-year quarter, signaling strong operational momentum.

A Decade of Shareholder Value Creation: The Power of Long-Term Investment in TSMC

Imagine allocating $10,000 to TSMC's shares ten years ago when they were valued at approximately $22.35 each. Such an investment would have secured roughly 447 shares. Today, with each share trading at $282.20, the initial capital would have appreciated to an astounding $126,264 purely from the increase in stock price. Beyond capital gains, TSMC has also rewarded its shareholders with consistent dividends throughout this period, further enhancing the investment's profitability.

Dividend Contributions to Overall Investment Returns

In addition to the substantial stock price appreciation, TSMC has distributed approximately $19.79 in dividends per share over the past decade. For an investor holding 447 shares, this translates to an additional $8,855 in earnings from dividends alone. The current dividend yield stands at a respectable 1.18%, reflecting the company's commitment to returning value to its shareholders.

Compounding Returns: The Total Value of a Decade-Long TSMC Investment

Combining the capital gains of $126,264 with the dividend earnings of $8,855, the total value of the initial $10,000 investment in TSMC over ten years would have reached $135,119. This remarkable outcome represents a cumulative return of 1,251.19%. In stark contrast, the broader S&P 500 index yielded a total return of 290.70% over the identical period, underscoring TSMC's exceptional performance.

Expert Projections and Recent Financial Achievements

Market analysts have assigned TSMC a "Positive" consensus rating, with a price target of $328.75. This target suggests a potential upside exceeding 16% from the current stock valuation. The company recently surpassed expectations in its third-quarter 2025 earnings report, posting an EPS of $2.92 against an estimated $2.59, and revenues of $33.09 billion compared to a consensus of $31.50 billion. The Chief Financial Officer attributed this strong performance to robust demand for cutting-edge process technologies, a trend expected to persist into the fourth quarter, with revenue projections ranging between $32.2 billion and $33.4 billion.

Strategic Appeal for Growth and Income-Oriented Investors

Considering both its historical stock appreciation and promising future outlook, TSMC presents an attractive opportunity for investors prioritizing growth. The company's consistent innovation in leading-edge process technologies positions it favorably for continued expansion. Furthermore, the steady dividend yield of 1.18% offers an additional benefit, making TSMC an appealing choice for those seeking a balance of capital growth and regular income from their investments.