Tech Has A Rates Problem Again

The report warns that a technical breakout in US Treasury yields and rising bond volatility are reintroducing interest rate risk to the technology sector.

Key Takeaways

• 1.US 10-year and 30-year yields have broken out of major consolidation patterns, signaling a potential shift to a higher-rate environment.
• 2.The technology sector is becoming increasingly sensitive to interest rates due to the capital-intensive nature of the AI infrastructure race.
• 3.Cloud capex for hyperscalers is projected to consume nearly all operating cash flow by 2026-2028, potentially driving free cash flow margins to zero.

Table of Contents

• Rates Matter Again
• The breakout
• Uncharted
• MOVE matters
• Tech's new rates problem
• AI infrastructure
• Downside fragility

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