MANAGING THE MARKET CAPITALIZATION OF PUBLIC TECHNOLOGY COMPANIES THROUGH FINANCIAL MULTIPLES
Abstract
The paper examines the role of financial multiples in shaping the market capitalization of technology companies, taking into account their business models, investment cycles, and the macro-financial environment. The aim of the study is to substantiate an approach to interpreting key financial multiples as aggregated indicators of the interaction between expected growth rates, risk profile, and profitability, rather than as universal valuation coefficients. Based on open market and financial data, it is demonstrated that differences in multiples across technology companies reflect heterogeneous scaling trajectories and investment monetization horizons, as well as the sensitivity of valuations to the prevailing monetary policy regime. The study identifies key methodological limitations of comparative analysis related to accounting choices, stock-based compensation, merger and acquisition effects, and capital-intensive investments, particularly in artificial intelligence infrastructure. It is shown that the effective use of financial multiples is possible only under conditions of context-sensitive metric selection, dynamic analysis, and the combination of quantitative assessment with qualitative interpretation of strategic value drivers. The findings have practical relevance for corporate financial management and investors in terms of managing market expectations and assessing the capitalization of technology companies. The results suggest that the effective use of financial multiples requires a context-sensitive approach based on careful metric selection, dynamic rather than static analysis, and the integration of quantitative indicators with qualitative assessment of strategic value drivers. The findings have practical relevance for corporate financial managers seeking to manage market expectations, as well as for investors assessing the sustainability and risk profile of technology company valuations. The study may be useful for industry analysts and researchers, investment funds, financial institutions and securities market regulators. Future research will focus on developing panel- and scenario-based models that quantitatively explain changes in the financial multiples of technology companies through the interaction of fundamental growth, risk, and profitability factors with macro-financial conditions.
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