How does interest rate hikes impact Snap and Nvidia stock?

According to the article you shared, Federal Reserve Chair Jerome Powell said that he expects **three interest rate hikes** in 2023 to combat inflation and support economic growth¹. This could have different effects on Snap and Nvidia stock, depending on how they react to changes in interest rates.

Generally speaking, higher interest rates tend to **lower** stock prices, because they make borrowing more expensive for companies and consumers, reduce earnings and cash flows, and increase the opportunity cost of investing in stocks⁵. However, some stocks may be more resilient or even benefit from higher interest rates, depending on their industry, growth prospects, competitive advantages, and financial strength⁵.

Snap is a social media company that generates revenue from advertising and content creation. It has been growing rapidly in recent years, but it also faces fierce competition from other platforms like Facebook and TikTok. Snap has not been profitable yet, and it relies on debt financing to fund its operations and investments⁴. Therefore, higher interest rates could hurt Snap's stock price by increasing its interest expenses, reducing its margins, slowing down its growth potential, and making it less attractive to investors who prefer stable earnings⁴⁵.

Nvidia is a semiconductor company that produces graphics processing units (GPUs) for gaming, artificial intelligence (AI), cloud computing, and other applications. It has been one of the best-performing stocks in recent years, thanks to its strong demand for its products across various markets. Nvidia has been profitable and cash flow positive for a long time, and it has a low debt-to-equity ratio compared to its peers⁵⁶. Therefore, higher interest rates could have less impact on Nvidia's stock price by having minimal effect on its interest expenses, maintaining its margins, supporting its growth potential, and making it more attractive to investors who value innovation and quality⁵⁶.

Of course, these are just some possible scenarios based on historical trends and current conditions. There are many other factors that could influence Snap and Nvidia stock prices such as market sentiment, earnings reports, product launches, acquisitions, lawsuits, and so on. Therefore, it is important to do your own research and consult with a professional financial advisor before making any investment decisions.😊

Source: Conversation with Bing, 3/7/2023(1) Why AMD, Snap, and NVIDIA Jumped Today | The Motley Fool. https://www.fool.com/investing/2017/03/20/why-amd-snap-and-nvidia-jumped-today.aspx Accessed 3/7/2023. (2) Why Nvidia Stock Zigzagged on Monday | The Motley Fool. https://www.fool.com/investing/2022/04/18/why-nvidia-stock-zigzagged-on-monday/ Accessed 3/7/2023. (3) Snap's $3.7 billion bet - The Motley Fool. https://www.fool.com/investing/2022/08/02/down-90-from-its-high-snap-making-37-billion-bet/ Accessed 3/7/2023. (4) NVDA - Short Interest - NVIDIA Corporation Stock - Short Squeeze .... https://fintel.io/ss/us/nvda Accessed 3/7/2023. (5) Snap Inc (SNAP) Stock Price & News - Google Finance. https://www.google.com/finance/quote/SNAP:NYSE Accessed 3/7/2023. (6) NVDA Short Interest Ratio and Volume (NVIDIA) - MarketBeat. https://www.marketbeat.com/stocks/NASDAQ/NVDA/short-interest/ Accessed 3/7/2023.

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