Why US Tech Leaders Defy Rising Interest Rates

Rising interest rates have been a significant headwind for U.S. equities. But not for leading technology companies. They are immune to the rising cost of money and the competition they face from money market funds and fixed-income securities, like Treasury bonds.

“Many tech companies have their value in high growth and higher outer years, so in the environment where interest rates are rising rapidly, it means the discount rate increases, and this affects them more,” Yevgeny Senderov, CEO of Dyninno Group of Companies, told¬†International Business Times. “Given that more of their value is in the outer terminal value of future growth years.” “However, on the other hand, high-tech companies have been traditionally more profitable than most of the traditional economy,” he added.

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