BiggerPockets Money Podcast · Tuesday, September 15, 2026
Professor Aswath Damodaran advises separating companies that build AI infrastructure (architecture companies) from those that aim to monetize AI products and services. He argues that lumping them together, especially by summing market caps, can distort valuations, and highlights that companies like Alphabet and Meta profit from advertising, not directly from AI architecture.
“The first thing to do is step back, instead of adding up all of those market caps because some of these companies make their money from building the architecture and some hope to make their money from the products and services that come out of the architecture, is to separate the companies and look at it differently.”
“And those should not be part of the AI discussion. They are ways in which these companies are coming up with the cash flows to fund them. Bring them in will just contaminate the question you're trying to answer. So in the case of Alphabet and Meta, they have incredibly profitable advertising businesses.”