NYU Valuation Guru Hails "Magnificent Seven" as Unstoppable Cash Machines Amid Market Shifts

A professor at New York University known for his expertise in valuation analysis has recommended buying the "Magnificent Seven" stocks during periods of market adjustment, emphasizing their consistent profitability. Aswath Damodaran, a finance professor at NYU's Stern School of Business, remarked in an interview that he has never encountered such reliable 'cash machines' as the "Magnificent Seven." He expressed confidence in their continued revenue generation despite market fluctuations.

The group includes leading global market cap stocks such as Tesla, Meta Platforms, Microsoft, Alphabet, Amazon, Apple, and Nvidia, which have played a pivotal role in the tech and AI boom. These companies have been significant drivers of substantial gains in U.S. equities over the years. The index tracking these companies has climbed 60% this year, and it has doubled its value through 2023.

Damodaran further suggested that amid market uncertainties, investors should consider increasing their holdings in at least one or more of these stocks due to their significant contributions to the economy and market growth. The electric vehicle maker, Tesla, notably fostered growth within this group. Despite adverse conditions affecting their stock earlier this year, investor optimism in its future potential has driven recent performance gains.

The professor highlighted the profitability of these seven U.S. tech giants, including Nvidia, affirming his personal investment in each of them. He implied that these companies' ongoing success and adaptability in evolving markets make them attractive options for value investors seeking returns in fluctuating market environments.