Trillion Dollar Market Caps: Fairy Tale Pricing or Business Marvels?

Aswath Damodaran · 3 Dec 2025 · aswathdamodaran.blogspot.com ↗

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Every claim below was made in this piece, quoted word for word and numbered in the order the piece makes them, so you can read it there rather than take our word for it. The sentence above each quote is our reading of the claim, not their wording. Each quote was checked against a stored copy of the page at build time; where the two differ, the quote is the fact.

Our reading
AI pricing is a big market delusion: each company’s implied revenues look plausible alone, but added together they exceed any market that could exist.

Their wordsthe delusion comes from the reality that if you aggregated these breakeven revenues across companies, the market is not big enough to sustain all of them

Interesting
Our reading
Investors in the largest tech companies have voluntarily surrendered their governance rights, leaving founders with unchecked power.

Their wordsinvestors at many tech companies, including most on the large cap list, have given up their corporate governance rights, often voluntarily (through the acceptance of shares with different voting rights), to founders and top management in these companies

Interesting
Our reading
A company priced in the trillions is not thereby overpriced; the test is what revenues and margins that price actually requires.

Their wordsIf you are an investor who considers any highly priced company to be overvalued, I hope that this post leads you to reconsider.

Interesting
Our reading
The revenue growth and margins needed to justify Nvidia’s and OpenAI’s late-2025 pricing are improbable.

Their wordsI think that the pathway that you would need (in terms of revenue growth and profitability) to justify Nvidia's and OpenAI's current pricing is improbable, but that is just my view

Interesting