Tech megacaps have sky-high multiples; can they really justify them?
The asteroid hit of DeepSeek’s shoestring-budget artificial intelligence chatbot, which has inflicted massive damage on some US tech stocks, raised the stakes even further.
The tech megacaps have sky-high multiples; that’s nothing new. Can they really justify them?
The market’s initial judgment is that they can — but that seems questionable.
Microsoft Profits from such huge investments will not be instant, but the expectations baked into the company’s valuations leave little room for disappointment
It’s true that you buy a company’s future earnings when you buy its stock. But it’s amazing that so much can be taken on trust.
Somehow, even after the almighty DeepSeek shock, investors still seem prepared to give Big Tech the benefit of the doubt.
John Authers Bloomberg 30 January 2025
https://www.bloomberg.com/opinion/articles/2025-01-30/ai-euphoria-saves-big-tech-from-so-so-earnings
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