Why the Trump Administration’s TikTok Valuation Stunned Investors

The numbers didn't add up—and Wall Street noticed immediately.

When the Trump administration slapped a price tag on TikTok that defied conventional valuation metrics, market veterans did a double-take. The figure seemed plucked from alternative reality—a valuation that ignored user growth curves, revenue projections, and standard tech multiples.

The Valuation Disconnect

Traditional tech valuations rely on measurable metrics: daily active users, engagement rates, revenue per user. The administration's approach appeared to bypass these fundamentals entirely. Instead, it factored in geopolitical considerations that don't typically appear on balance sheets.

Market professionals watched in disbelief as political calculus trumped financial analysis. The move revealed how quickly established valuation frameworks can evaporate when national security enters the equation.

Investors left scratching their heads now face a new reality—where spreadsheet models matter less than political winds. Because nothing says 'stable investment environment' like having your valuation methodology rewritten by executive order.

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Indeed, Ashwin Binwani, founder of Alpha Binwani Capital, who doesn’t own shares in ByteDance, said that the $14 billion estimate might be the “most undervalued tech acquisition of the decade.” He believes that TikTok’s U.S. business is worth at least three times that amount. Even conservative estimates suggest that the U.S. arm, which has 170 million active users and brings in over $10 billion in revenue per year, should be valued much higher.

In fact, at $14 billion, TikTok’s price-to-sales ratio is similar to that of low-growth companies like Exxon Mobil (XOM) and General Mills (GIS) at only about 1.4x. In contrast, Meta Platforms (META), which owns Instagram, trades at about 10x sales, while YouTube’s parent Alphabet (GOOGL) trades around 8x. Nevertheless, the proposed deal WOULD turn TikTok U.S. into a new joint venture where ByteDance holds less than 20%. And although Trump said that Chinese President Xi Jinping supports the deal, China has not publicly confirmed this.

Is ORCL Stock a Good Buy?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on ORCL stock based on 25 Buys, eight Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average ORCL price target of $337.62 per share implies 19.1% upside potential.