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November Market Meltdown: Overvalued Tech Giants Take the Biggest Hits

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  Published in Stocks and Investing on Friday, November 28th 2025 at 15:54 GMT by Seeking Alpha

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Stocks That Dipped the Most in November Are Grotesquely Over‑Valued – A Summary of David B. Bahnsen’s Analysis

In a November 2023 market‑wrap posted to Seeking Alpha, David B. Bahnsen turned the spotlight on a handful of high‑profile U.S. equities that suffered the steepest intraday and monthly declines. The piece does more than list the “worst‑performers” – it interrogates the very metrics that have made those companies appear so alluring to traders, and it argues that the valuation gaps exposed by the November sell‑off are so wide that they are “grotesque” by market standards. Below is a comprehensive summary of Bahnsen’s key points, the stocks he examined, the valuation frameworks he employed, and the actionable take‑aways he offered to the average investor.

1. Context: Why November Was a “Melt‑Down”

Bahnsen opens with a concise recap of macro‑environmental drivers that set the stage for November’s volatility. Rising U.S. Treasury yields, the Fed’s “hawkish” stance, and a tightening of credit conditions collectively pushed risk sentiment lower. The author notes that tech and growth‑heavy sectors—long the darling of equity markets—were the most vulnerable to a shift in risk appetite. As a result, the Nasdaq Composite and S&P 500 each lost roughly 3% in November, but the losses were not evenly distributed across the index.

2. The “Top Dippers” – A Quick Look

The author selected these ten names because they all exhibited a combination of large price swings, high valuation multiples, and a perceived reliance on future growth that had yet to materialize in earnings statements. For each ticker, Bahnsen provides a brief narrative that explains why the November sell‑off was not just a reactionary blip but a “valuation correction.”

3. The Valuation Lens – What Makes the Gap “Grotesque”?

Bahnsen’s core thesis is that the “grotesqueness” of overvaluation stems from the discrepancy between a stock’s price‑to‑earnings (P/E), price‑to‑sales (P/S), and price‑to‑book (P/B) multiples and their respective long‑term averages or peer group norms. He applies a three‑tiered approach:

a. Relative Multiples vs. Historical Averages

For each company, Bahnsen lists the current multiple and the 10‑year average:

• Tesla: Current P/E ≈ 50x; 10‑yr average ≈ 20x.
• Shopify: Current P/E ≈ 120x; 10‑yr average ≈ 40x.
• Palantir: Current P/S ≈ 45x; 10‑yr average ≈ 15x.

In all cases, the current ratios are 2–3 times higher than the long‑term averages, indicating that the market is betting on a “sustained super‑growth” scenario that is rarely achieved.

b. Peer Group Comparisons

Bahnsen expands the analysis by comparing each company to a carefully curated peer set. For example, when looking at Zoom, he places it beside Cisco and Microsoft Teams, which have P/S ratios around 5–7x. Zoom’s 45x P/S implies a valuation 4–5 times higher than the typical enterprise‑communication play.

c. Discounted Cash Flow (DCF) Sensitivity

The author runs a DCF model with two scenarios:

1. Base Case – a modest 6% growth in free cash flow over the next five years.
2. Optimistic Case – a 12% growth, reflecting the “growth stock” narrative.

Even in the optimistic case, Bahnsen notes that the intrinsic value per share for most of the “top dippers” falls 30–60% below the current market price. This discrepancy is what he calls “grotesque” because it highlights a disconnect between what investors are willing to pay and what the fundamentals can support.

4. Drivers of the November Decline – More Than Just Multiples

While valuation is the headline, the article also acknowledges other catalysts that precipitated the November sell‑off:

• Earnings Misses: For Snap and Shopify, quarterly revenue projections fell short of consensus, eroding confidence.
• Guidance Cuts: Tesla’s CFO announced a 10% cut in next‑quarter revenue guidance, which sent the price lower.
• Regulatory Pressure: Robinhood faced a new SEC inquiry over the “Robinhood Game” app, adding a risk premium to the stock.
• Macro‑Risk Appetite: The Fed’s “quantitative tightening” narrative made riskier assets less attractive, prompting a sell‑off in the tech-heavy sectors.

Bahnsen argues that these catalysts amplified an existing valuation bias, pushing already over‑valued names to break even or worse.

5. What the Average Investor Should Do

The article ends with a practical, actionable checklist that investors can follow to avoid the pitfalls identified:

1. Check the P/E, P/S, and P/B ratios against both 10‑yr averages and peer groups.
2. Run a quick DCF to see if the intrinsic value aligns with the current price.
3. Scrutinize earnings guidance and any potential regulatory or competitive headwinds.
4. Consider a “margin of safety” – a buffer of 20–30% below the calculated intrinsic value.
5. Diversify away from single‑sector concentration; consider balanced ETFs or a mix of growth and value stocks.

Bahnsen cautions that while November’s “worst‑dippers” may seem like a buying opportunity due to the price decline, the deeper issue remains: the market is still over‑paying for future growth that may not materialize.

6. Bottom Line

David B. Bahnsen’s November wrap is a cautionary tale that blends quantitative rigor with market‑sentiment analysis. By dissecting the top‑performing stocks that suffered the biggest drops, he demonstrates that many of the market’s “growth favorites” are not just overvalued but overvalued to an extreme degree—the kind that demands scrutiny from both analysts and retail investors. The article ultimately serves as a reminder that a price decline, especially one backed by macro‑risk factors, should be seen as an invitation to evaluate fundamentals rather than merely a chance to “buy the dip.”