Nvidia, Palantir, Tesla Tumble In Pre-Market Trading As Rising Yields Crush High P/E Tech — Gary Black Sees Fed Cut Bets Colliding With Inflation

Gary Black, Managing Director of The Future Fund LLC, expressed his concerns about the impact of rising long-term interest rates on certain stocks.

High P/E stocks Like Tesla, Nvidia, Palantir Hit by Yields

Black pointed out that Tesla Inc. (NASDAQ:TSLA), NVIDIA Corporation (NASDAQ:NVDA) and Palantir Technologies Inc. (NASDAQ:PLTR) could be the most affected by the rise in 10-year Treasury yields to 4.29%.

He explained that higher price-to-earnings stocks are most vulnerable when long-term treasuries rise because a significant percentage of their value is “in the tail” which, when discounted at a higher rate, disproportionately impacts their values.

Tesla trades at a P/E ratio of 193.51, Palantir at a strikingly high 520.77, while Nvidia sits comparatively lower at 49.55.

$NVDA $PLTR $TSLA and other long duration stocks are likely to be impacted most if 10yrTYs continue to rise. In today's pre-mkt trading, tech stocks extended last week's losses, with $NVDA -1.6%, $PLTR -2.3%, and ...