Nvidia leads companies minting money as interest earned from cash surges

With interest rates reaching decade-high levels, some non-financial companies in the S&P 500 are now earning more from interest income than they pay in debt expenses. During the first quarter, over three dozen firms achieved this feat, including notable names like Alphabet Inc., Tesla Inc., and Johnson & Johnson. As benchmark rates exceed 5%, companies are investing in money-market funds, government securities, and certificates of deposit to reap higher returns. Federal Reserve officials signal a commitment to maintaining elevated rates. One standout example is chipmaker Nvidia Corp., which reported $359 million in interest income, covering both interest expenses and dividends. Overall, companies reporting higher interest income saw a 60% increase compared to the first quarter of 2023, while interest expenses rose by only 5% to $2.84 billion.

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By Nina Trentmann

With interest rates at more than decade-highs, corporate finance chiefs are finding that money can indeed beget money. 

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