While technology hasn’t brought us the flying cars or cloned dinosaurs we thought we might find in the 21st century, it still surged ahead by leaps and bounds in recent decades. That should provide some comfort to investors bemoaning the market’s recent rough patch, DataTrek Research says.
“Tech stock valuations may rise and fall with interest rates, but innovation doesn’t care about the yield curve,” Colas wrote Tuesday. “As markets struggle to adapt to higher rates in 2023, it is useful to remember that it is disruptive innovation which drives long-run stock market returns. Not the yield curve.”
Framed that way, it’s easier to understand why the so-called Magnificent Seven big tech firms—Apple , Amazon.com , Google parent Alphabet , Facebook parent Meta Platforms , Microsoft , Nvidia , and Tesla —have surged. Enthusiasm about the transformative power of artificial intelligence and machine learning across industries has fueled investor interest.
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