VALUATION GIANTS: A MULTIVARIATE INVESTIGATION INTO THE RISE OF THE MAGNIFICENT SEVEN

Abstract

This study examines the factors determining market value in leading technology companies in terms of financial performance, capital structure, and investor sentiment. Using a fixed effects model, the relationships between market value and variables such as earnings per share (EPS), debt-to-equity ratio, return on equity (ROE), return on assets (ROA), price-to-book ratio, and return on investment (ROI) were analyzed. The findings indicate that EPS and ROI have a positive effect on market value, while the debt-to-equity ratio has a negative effect. This suggests that investors are sensitive to profitability increases and that perceptions of financial risk influence valuation. Interestingly, negative relationships were found between ROE, ROA, and market value, implying that high leverage or artificially inflated profits may be perceived as risk factors. R&D and SG&A expenditures were found to have no significant short-term impact. Overall, the results support that market valuation in large-cap technology companies is shaped not only by financial indicators but also by investor perceptions and growth expectations.