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Disclaimer: The blog posts and comments on this blog and posts on social networks are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is". The blog is stocks analysis and valuation, Bitcoin, Cryptocurrencies, Artificial Intelligence, AI, deep-learning focused. Independent, unbiased AI insights. Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blog posts on this blog and posts on social networks. Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blog post and posts on social networks! The blog is property of Wolfteam Ltd. www.wolfteamedge.com Respectfully yours, Petar Posledovich

Thursday, February 1, 2024

Technology Stocks And Interest Rates


 

Technology stocks, especially the Magnificent 7 technology stocks are overvalued currently.

With current interest rates at 5.50 % Federal Funds Rate targeted by the Federal Reserve, the Nasdaq Composite is overvalued by 32 % on average in the mid-term. The Magnificent 7 Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla are overvalued by 43 % on average.

If interest rates go down to 4.0 % Federal Funds Rate, the Nasdaq Composite will be overvalued by circa 22 %, according to Wolfteam Ltd.'s estimates.

If the Federal Funds Rate goes up to 6.25 %, the Nasdaq Composite will be overvalued by 44 %, while the Magnificent 7 will be overvalued by 57 %, according to Wolfteam Ltd.'s projections and estimates.

Technology stocks are very sensitive to interest rates.

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