Markets are richly priced across the board, says NYU's Aswath Damodaran

Core Viewpoint - The discussion highlights the differing perspectives on the valuation of mega-cap stocks, particularly those with market capitalizations exceeding $1 trillion, emphasizing that while some view them as overvalued, others see plausible pathways for growth that justify their current valuations [1] Group 1: Mega-Cap Stocks Valuation - Mega-cap stocks, such as Nvidia, are at unprecedented market cap levels, with Nvidia potentially reaching a $5 trillion market cap if it maintains high margins and achieves $600 billion in revenue, which is seen as plausible given its current trajectory [1] - The disagreement on valuations stems from individual assessments of the plausibility of these growth pathways, indicating that investors must evaluate the numbers personally to form their own conclusions [1] - The market is not just bifurcated between the mega-cap stocks and the rest; the remaining 493 companies in the S&P 500 are also trading at high earnings multiples, suggesting that the entire market is richly priced [1] Group 2: Market Dynamics and Future Outlook - The remaining companies in the S&P 500 are trading at 22 to 23 times earnings, and they generally exhibit less favorable operating metrics compared to the mega-cap stocks, challenging the notion that only the mega-cap stocks are overvalued [1] - The overall market has been buoyed by rising tides, with high growth and margins among mega-cap stocks, but there are concerns that sustaining this growth will become increasingly difficult, as evidenced by market reactions to competitive announcements [1] - The potential for shocks to the system, such as competitive pressures affecting stock prices, raises questions about the sustainability of current valuations and growth trajectories [1]