24/7 Wall Street
30 May 2026, 15:47 UTC · 1h ago
Source · https://247wallst.com/investing/2026/05/30/the-10-year-treasury-yield-approaching-5-could-reshape-schgs-next-12-months/
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A sustained rise in the 10-year Treasury yield above 5.00% would likely trigger a significant valuation contraction for large-cap growth assets like SCHG. — High discount rates directly reduce the present value of long-duration cash flows, and the author cites a previous 10% drop during a similar yield spike.
-0.90Any guidance moderation in AI capital expenditure from Microsoft, Alphabet, Meta, or Amazon could immediately compress multiples for the fund's top holdings. — The fund's growth thesis is heavily leveraged on the hyperscaler capex cycle; any slowdown suggests a peak in the AI-driven earnings trajectory.
-0.80The current divergence of rising long-term yields while short-term Fed Funds Rates remain steady creates a highly unfavorable environment for growth stock multiples. — This specific rate environment removes the primary valuation tailwind for mega-cap tech stocks.
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Data center equipment growth is estimated by PineBridge and MetLife to be roughly 25% annually for the next four to five years. — Strong, multi-year structural growth in infrastructure supports the fundamental earnings of the AI leaders in the portfolio.
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The article warns that any moderation in its AI capex guidance could compress its valuation multiple.
The article warns that any moderation in its AI capex guidance could compress its valuation multiple.
The article warns that any moderation in its AI capex guidance could compress its valuation multiple.
The article warns that any moderation in its AI capex guidance could compress its valuation multiple.
As a top holding of SCHG, it is noted to be facing headwinds from rising Treasury yields.
While a leader in the AI cycle, its valuation is cited as being sensitive to the same capex moderation risks as the hyperscalers.
Mentioned only as a source of data regarding data center capex levels.
[a_to_b] NVIDIA provides data center equipment/chips used in Amazon's AI capital expenditure cycle.
[a_to_b] NVIDIA provides data center equipment/chips used in Meta's AI capital expenditure cycle.
[a_to_b] NVIDIA provides data center equipment/chips used in Microsoft's AI capital expenditure cycle.
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24/7 Wall Street
1h ago
[a_to_b] NVIDIA provides data center equipment/chips used in Alphabet's AI capital expenditure cycle.
