3 AI Stock Winners & 3 Write-Offs - Prof. Damodaran

Madison Square Garden Sports assets are characterized as trophy investments where valuations are driven by billionaire demand rather than cash flows.

MicroStrategy's Bitcoin strategy is viewed as a dangerous misuse of corporate cash that undermines financial stability.

Meta's advertising business remains a 'cash machine,' providing a safety net for its aggressive AI spending.

Apple is taking a 'wait and see' approach to AI, which the creator views as their standard strategic move.

Salesforce's competitive advantage of high switching costs is being tested by AI's potential to simplify complex software interfaces.

Oracle's traditional software dominance is challenged by AI's ability to automate tasks that previously relied on high switching costs.

Microsoft faces the innovator's dilemma as AI threatens to disrupt its high-margin, sticky software business model.

Duolingo is viewed as an early casualty of AI because its core language learning service can now be performed effortlessly by machines.

Alphabet is noted for its strong performance in 2025, helping sustain the overall momentum of the mega-cap tech group.

Broadcom's valuation is considered plausible based on reverse-engineered revenue growth requirements of 15-20%.

Amazon is viewed as having the greatest capacity for massive scale due to its ability to disrupt almost any business sector.

Damodaran fully exited Nvidia in 2025, believing the bulk of the AI infrastructure growth is already priced in.

Damodaran sold Tesla because it became a political investment, making the business outlook too difficult to predict.