DeepSeek Will Increase AI Adoption

 

DeepSeek, developing for 6 million USDs a chat bot that can effectively compare with OpenAI ChatGPT's latest chat bot, which cost 100 million USD to develop is not a minor breakthrough, according to Wolfteam Ltd.'s projections and estimates.

DeepSeek's model has shown that there are clever, efficient ways to develop artificial intelligence, AI more cheaply,  at a fraction of the cost of the current leading models of OpenAI, Alphabet's Gemini, xAI's Grok etc.

These developments will increase the proliferation of artificial intelligence, AI development and make AI ubiquitous on all devices - from super computers to powerful corporate and government computers, to work stations, to desktops, to smart phones.

What happened with computers tens of years ago, staggering fast the development from a few super computers globally to personal computer stations and smartphones is happening at a lightning speed with artificial intelligence, AI now. All this is driven by high computing power developed by companies like NVIDIA, Broadcom, Intel, AMD, Qualcomm, etc., which constantly break the barriers of humanly possible by producing computer processing units, graphical processing units and chips for smartphones with extraordinary speed, efficiency and power capabilities

These CPUs, GPUs power powerful server farms and work stations and personal computers and smartphones on which one develops artificial intelligence.

So the AI's recent breakthroughs will only make artificial intelligence, AI development ubiquitous, in Wolfteam Ltd.'s view.

CVC And Apollo Comparison

Apollo Global Management or Apollo is the largest private credit asset manager in the world. Apollo has 751 billion USDs of assets under management as of end 2024, with 616 billion USDs deployed in private credit.

CVC Capital Partners or CVC has 200 billion EURs under management with fee paying assets under management of 147 billion EURs as of end 2024 deployed mainly in private equity, but also infrastructure and private credit. 

Apollo's Price/Earnings ratio is 20.54, while CVC's Price/Earnings ratio is 54.41. Apollo's market capitalization is 90.33 billion USD, while CVC's market capitalization is 24.09 billion EURs.

Both Apollo and CVC do not pay dividends.

Both Apollo and CVC are undervalued, in Wolfteam Ltd.'s view.

Apollo's intrinsic value is 142 billion USD, while CVC's intrinsic value is 44 billion EUR's, according to Wolfteam Ltd.'s projections and estimates.

Here is Apollo's 2024 calendar earnings statement:

 Revenues
Asset Management
Management fees $444 $476 $523 $1,772 $1,899
Advisory and transaction fees, net 141 181 205 623 822
Investment income (loss) 150 230 395 1,032 1,305
Incentive fees 21 35 42 80 150
Retirement Services
Premiums 3,586 389 155 12,749 1,318
Product charges 226 267 260 848 1,016
Net investment income 3,354 4,101 4,237 12,080 15,718
Investment related gains (losses) 2,621 1,539 (1,037) 1,428 2,045
Revenues of consolidated variable interest entities 495 552 493 1,441 1,822
Other revenues 8 3 10 591 19
Total Revenues 11,046 7,773 5,283 32,644 26,114
Expenses
Asset Management
Compensation and benefits (979) (605) (732) (2,722) (2,608)
Interest expense (47) (55) (67) (145) (226)
General, administrative and other (229) (326) (285) (872) (1,170)
Retirement Services
Interest sensitive contract benefits (2,595) (2,599) (1,642) (6,229) (8,949)
Future policy and other policy benefits (4,088) (793) (623) (14,434) (3,054)
Market risk benefits remeasurement gains (losses) (570) (524) 456 (404) 102
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired (186) (244) (263) (688) (941)
Policy and other operating expenses (481) (670) (535) (1,837) (2,136)
Total Expenses (9,175) (5,816) (3,691) (27,331) (18,982)
Other Income (Loss) – Asset Management
Net gains (losses) from investment activities 21 15 25 7 58
Net gains (losses) from investment activities of consolidated variable interest entities 35 44 20 130 90
Other income (loss), net 34 70 87 136 155
Total Other Income (Loss) 90 129 132 273 303
Income (loss) before income tax (provision) benefit 1,961 2,086 1,724 5,586 7,435
Income tax (provision) benefit1 1,620 (317) (62) 923 (1,062)
Net income (loss) 3,581 1,769 1,662 6,509 6,373
Net (income) loss attributable to non-controlling interests (825) (958) (176) (1,462) (1,796)
Net income (loss) attributable to Apollo Global Management, Inc. 2,756 811 1,486 5,047 4,577
Preferred stock dividends (24) (24) (24) (46) (97)
Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $2,732 $787 $1,462 $5,001 $4,480
Earnings (Loss) per share
Net income (loss) attributable to Common Stockholders - Basic $4.53 $1.30 $2.42 $8.32 $7.39
Net income (loss) attributable to Common Stockholders - Diluted $4.44 $1.29 $2.39 $8.28 $7.33
Weighted average shares outstanding - Basic 584 585 584 581 586
Weighted average shares outstanding - Diluted 601 589 603 589 604 

Here is an excerpt from CVC's full year 2024 activity update:

 FPAUM increased from €98.2bn as at 31 December 2023 to €147.3bn as at 31 December
2024, or +50%
– Following the activation of Europe / Americas Fund IX and Asia VI in H1, and the inclusion of
Infrastructure1, additional FPAUM growth in 2024 was mainly driven by fundraising in Credit
and Secondaries
Investment
Activity
Deployment2:
– Strong year-on-year recovery in deployment activity: +71% vs. FY 2023
– Private Equity deployment reached €13.3bn in FY 2024 vs. €4.2bn in FY 2023
o 13 new investments for Europe / Americas Fund IX, following its activation in May, and 23
investments in total across Europe / Americas, StratOps and Asia
– Attractive deployment opportunities for CVC Secondary Partners drove an increase of +93%
year-on-year, with €2.4bn deployed3 in FY 2024 vs. €1.2bn in FY 2023
– Deployment4 across CVC Credit reached €8.0bn in FY 2024, up from €6.7bn in FY 2023
(+20%), highlighting our strong origination and execution capabilities across Performing and
Private Credit strategies. CVC Credit achieved record levels of deployment in 2024, although
refinancing activity resulted in a high level of repayments slowing overall growth in FPAUM
o Record year for CLO issuances across Europe and the U.S. with 25 CLOs issued5
– Infrastructure remained highly selective in making the final investments from DIF VII and
Value Add III, ahead of the launch of successor funds in 2025
Realisations6:
– Whilst realisations across all strategies increased by 114% year-on-year, we continue to
remain cautious on the near-term outlook given inconsistent activity levels across the market
Fund
Performance
– Our portfolio performance continues to be resilient across all strategies: EBITDA growth of
c.10% across Private Equity
– Strong realised returns7: 4.0x Gross MOIC and 30% Gross IRR in 2024
– Value creation across the Private Equity and Infrastructure portfolios of 12%, growing at a
consistent pace throughout the year
– All material funds continue to perform on or above plan8
Fundraising – We continue to execute on our fundraising targets, with €15.7bn of capital raised9 in FY 2024
– Continued strong momentum in Credit and Secondaries:
o EUDL IV securing in excess of €7.6bn of investable capital as at 31 December 2024 vs.
€6bn target (final close expected in 2025), and Capital Solutions III reaching its final close
at €1.6bn vs. €1.25bn target
o Following launch June, we raised $3.5bn10 as at 31 December 2024 for SOF VI in
Secondaries, progressing towards its $7bn target
– StratOps III expected to reach final close in Q1 2025
– Infrastructure fundraising for DIF VIII & Value Add IV launched in January 2025, with
combined target size of €8bn
– Private Wealth:
o Subscriptions for CVC-CRED progressing well: €0.7bn in aggregate value11 as at 31
December 2024, following the launch in Q2 2024
o Launch of CVC-PE, our new Private Equity Evergreen product, in January 2025, ahead of
plan
o Accelerating the preparation of further Evergreen products, together with increased
investment in our Private Wealth platform

 

US And Global Inflation Will Speed Up Again

 

US and global inflation, partially influenced by US President Donald Trump's tariffs and other policies will again start rising, according to Wolfteam Ltd.'s projections and estimates.

The Federal Reserve has created too much monetary reserves, aka the US central bank has printed too much money, which under tariffs will increase the money velocity and consumer prices will rise.

Inflation will rise, because tariffs essentially create scarcity of goods and services in their essence. Tariffs are a bit of planning the economy or politicians running the economy. Tariffs will create scarcity for computer chips again, which will raise prices of home appliances like refrigerators, microwaves, washing machines etc. and also raise the prices of automobiles, like the last time computer chips were scarce.

Tariffs on farm products and other commodities will increase the prices of commodities like wheat, corn, soy beans, but also oil and gas will rise in prices, in Wolfteam Ltd.'s view. 

And after prices rise, the Federal Reserve will raise the Federal Funds Rate.

The Federal Reserve Could Hike Rates In 2025

 

Currently, the market forecasts 2 Federal Funds Rate hikes by the Federal Reserve in 2025.

Trump's tariffs and other policies could, however speed up inflation and influence upwards inflation expectations.

These developments could lead the Federal Reserve to hike the Federal Funds Rate two times in 2025, instead of cutting it, according to Wolfteam Ltd.'s projections and estimates.

Such a development would tank the Nasdaq Composite by more than 15 %. The Nasdaq Composite would recover within 2025, though, in Wolfteam Ltd.'s view.

My Investments Portfolio

 

Here is my, Petar Vladimirov Posledovich, owner of Wolfteam Ltd.'s investment portfolio:

 

1) Robinhood Markets 57 % of the portfolio

2) Petroleo Brasileiro 15 % of the portfolio 

3) Celestica 12 % of the portfolio

4) Vale 6 % of the portfolio

5) Eldorado Gold Corporation 10 % of the portfolio

TPG Valuation

 

Texas Pacific Group or TPG, the global private equity, real estate and private markets giant is listed on Nasdaq with 21.55 billion USD market capitalization.

TPG is undervalued according to Wolfteam Ltd.'s projections and estimates.

TPG's intrinsic worth is 34 billion USD, in Wolfteam Ltd.'s view.

TPG pays a hefty 3.53 % dividend yield. TPG's Price/Earnings ratio is very high at 931.99, but this is due mainly to TPG focusing on growth in the last two years.  

Here is TPG's income statement:

TPG has 246 billion USD assets under management, up 11% in the last twelve months and 141 Fee Earning Assets Under Management, up 3 % over the same period

($ in thousands, except share and per share amounts) 4Q’23 4Q’24 FY’23 FY’24
Revenues
Fees and other $ 529,903 $ 527,248 $ 1,534,626 $ 2,087,076
Capital allocation-based income (loss) 453,234 549,166 855,285 1,413,006
Total revenues 983,137 1,076,414 2,389,911 3,500,082
Expenses
Compensation and benefits:
Cash-based compensation and benefits 188,099 231,865 547,377 835,328
Equity-based compensation 205,813 308,457 654,922 1,006,312
Performance allocation compensation 319,028 376,229 591,676 930,053
Total compensation and benefits 712,940 916,551 1,793,975 2,771,693
General, administrative and other 171,561 120,655 482,574 583,733
Depreciation and amortization 23,446 37,942 47,673 135,386
Interest expense 14,800 23,098 38,528 87,511
Expenses of consolidated Public SPACs — — 1,053 —
Total expenses 922,747 1,098,246 2,363,803 3,578,323
Investment income (loss)
Net gains (losses) from investment activities (4,895) 1,007 6,564 (29,326)
Interest, dividends and other 13,674 43,353 42,622 82,743
Investment and other income of consolidated Public SPACs — — 8,359 —
Total investment income (loss) 8,779 44,360 57,545 53,417
Income (loss) before income taxes 69,169 22,528 83,653 (24,824)
Income tax expense 26,757 11,434 60,268 52,091
Net income (loss)(1) 42,412 11,094 23,385 (76,915)
Net income (loss) attributable to redeemable equity in Public SPACs — — 12,044 —
Net income (loss) attributable to non-controlling interests in TPG Operating Group 7,943 (30,095) (92,411) (175,927)
Net income (loss) attributable to other non-controlling interests 21,296 28,209 23,662 75,529
Net income (loss) attributable to TPG Inc. $ 13,173 $ 12,980 $ 80,090 $ 23,483
Net income (loss) per share data:
Net income (loss) available to Class A common stock per share
Basic $ 0.16 $ 0.04 $ 0.89 $ 0.00
Diluted $ 0.04 $ (0.06) $ (0.04) $ (0.42)
Weighted-average shares of Class A common stock outstanding
Basic 80,665,902 106,612,378 80,334,871 100,219,905
Diluted 343,887,011 364,946,593 317,944,496 364,725,579

 

 

AI Stocks Will Again Outperform In 2025

Artificial intelligence, AI stocks like NVIDIA, Broadcom, AMD, Celestica, Reddit, Palantir etc. will again outperform in 2025, according to Wolfteam Ltd.'s projections and estimates.

Artificial intelligence, AI's gravitational pull is just too strong. Via AI businesses can save a lot on costs and the nearly 300 000 - 400 000  people annual cuts in technology companies have shown just that in the last 3-4 years. There is a chart showing that since 2015 technology companies have hired more than 4 000 000 people and the cuts up to 2022 were only like 15 % of the total. The artificial intelligence, AI job cuts, however accelerated since 2022 and now the total of cuts compared to the hired total is more like 30 %.

Investors generally have liked technology job cuts and have rewarded with stock price gains the technology companies that have cut the most. Cases in point are Meta and Alphabet. Investors, apparently think technology companies are bloated with personnel and cuts are needed to improve profitability in the long-term. And profitability will ultimately drive dividends pay outs which investors reward with for example 20 % stock price/market capitalization jumps when inauguration dividends are announced. Much like the case of Apple inc, years ago when they announced they would start paying out dividends.

The US technology labor force unemployment is 6.00 %, compared with the overall unemployment rate of 4.00 % for January 2025. This discrepancy is due to the efficiency AI companies like NVIDIA, Broadcom, AMD, Celestica, Reddit, Palantir etc. provide. They make businesses run more efficiently and efficiencies are yet to be realized. That is why their stock market capitalization will continue to benefit in 2025, in Wolfteam Ltd.'s view.

Blackstone And CVC Comparison

 

Blackstone Inc, the global leader in private equity, real assets, private credit looks overvalued when compared to CVC Capital Partners or CVC, one of the leading firms in private equity, private credit which looks undervalued, comparatively, according to Wolfteam Ltd.'s projections and estimates.

Blackstone sports 199.93 billion USD market capitalization, while CVC has 24.24 billion EURs of market capitalization. Blackstone's Price/Earnings ratio is 45.52, while CVC's Price/Earnings ratio is 53.26. Blackstone distributes 2.40 % dividend yield, while CVC does not pay any dividends.

Blackstone's total assets under management are 1.127 trillion USDs, while CVC's assets under management are 193 billion EURs, according to both firms' latest financial reports filings.

On the accounts above Blackstone seems overvalued relative to CVC, while CVC seems undervalued on a relative basis.

Here are Blackstone's capital metrics:

Total Assets Under Management (“AUM”) of $1,127.2 billion
– Fee-Earning AUM of $830.7 billion
– Perpetual Capital AUM of $444.8 billion
▪ Inflows of $57.5 billion in the quarter and $171.5 billion for the year
▪ Deployment of $41.6 billion in the quarter and $133.9 billion for the year
▪ Realizations of $25.9 billion in the quarter and $87.1 billion for the year
 

 

Here are CVC's capital metrics:

We are a scaled and
diversified global leader
in Private Markets with
multiple growth avenues.
Key Highlights
Note: All figures are as at 30 June 2024.
1. Acquisition of CVC DIF closed on 1 July 2024.
2. Includes GP commitment.
3. Includes GP commitment and overflow fund.
4. Source: J.P. Morgan Collaterised Loan Obligations Weekly
Datasheet as at 15 July 2024, data excludes Private Credit/
Middle Market deals and includes re-issues of collateralised loan
obligations (‘CLOs’).
5. Does not include €0.3bn in LP co-investment/sidecar vehicles.
Includes GP commitment.
€175bnExcluding CVC DIF
€193bnIncluding CVC DIF

Here is Blackstone's latest fourth quarter 2024 financial statement:
 

Blackstone | 3
BLACKSTONE’S FOURTH QUARTER AND FULL YEAR 2024 SEGMENT EARNINGS
Fee Related Earnings per Share is based on end of period DE Shares Outstanding (see page 24, Share Summary). DE per Common Share is based on DE Attributable
to Common Shareholders (see page 23, Shareholder Dividends) and end of period Participating Common Shares outstanding. Full year FRE per Share and DE per
Common Share amounts represent the sum of the last four quarters. See pages 32-33 for the Reconciliation of GAAP to Total Segment Measures.% Change % Change
($ in thousands, except per share data) 4Q'23 4Q'24 vs. 4Q'23 FY'23 FY'24 vs. FY'23
Management and Advisory Fees, Net 1,653,831$ 1,859,291$ 12% 6,663,244$ 7,133,534$ 7%
Fee Related Performance Revenues 168,994 1,399,276 728% 858,527 2,135,945 149%
Fee Related Compensation (470,408) (1,077,477) 129% (2,088,110) (2,739,322) 31%
Other Operating Expenses (310,874) (345,169) 11% (1,084,333) (1,248,092) 15%
Fee Related Earnings 1,041,543$ 1,835,921$ 76% 4,349,328$ 5,282,065$ 21%
Realized Performance Revenues 693,213 865,080 25% 2,061,102 2,287,031 11%
Realized Performance Compensation (287,628) (289,595) 1% (896,017) (951,246) 6%
Realized Principal Investment Income 19,202 25,613 33% 110,932 92,526 (17)%
Net Realizations 424,787 601,098 42% 1,276,017 1,428,311 12%
Total Segment Distributable Earnings 1,466,330$ 2,437,019$ 66% 5,625,345$ 6,710,376$ 19%
Distributable Earnings 1,388,180$ 2,169,493$ 56% 5,060,955$ 5,966,742$ 18%
Additional Metrics:
Net Income Per Share of Common Stock, Basic 0.20$ 0.92$ 360% 1.84$ 3.62$ 97%
FRE per Share 0.86$ 1.50$ 74% 3.58$ 4.32$ 21%
DE per Common Share 1.11$ 1.69$ 52% 3.95$ 4.64$ 17%
Total Segment Revenues 2,535,240$ 4,149,260$ 64% 9,693,805$ 11,649,036$ 20%
Total Assets Under Management 1,040,192,447$ 1,127,179,996$ 8% 1,040,192,447$ 1,127,179,996$ 8%
Fee-Earning Assets Under Management 762,607,902$ 830,708,603$ 9% 762,607,902$ 830,708,603$ 9% 

Here are CVC's earnings:

Statutory statement of profit or loss (€ 000) Jun-24 Jun-23
Management fees 443,739 365,713
Carried interest and performance fees 108,725 87,531
Investment income 83,274 49,295
Other operating income 2,491 1,033
Total revenue 638,229 503,572
Advisory fee expense – (210,744)
Personnel expenses (182,493) (27,568)
General and administrative expenses (106,757) (31,561)
Change in valuation of forward liability (209,420) (58,762)
Foreign exchange (losses)/gains (191) 2,169
Expenses with respect to investment vehicles (1,609) (137)
EBITDA 137,759 176,969
Depreciation and amortisation (33,580) (12,923)
Total operating profit 104,179 164,046
Finance income 4,400 5,971
Finance expense (22,495) (13,688)
Profit before income tax 86,084 156,329
Income tax charge (6,049) (8,545)
Profit after income tax 80,035 147,784
Attributable to:
Equity holders of the parent 44,794 136,330
Non-controlling interests 35,241 11,454

Although Blackstone is more profitable than CVC, still Blackstone's looks overvalued compared to CVC. Part of the reason for Blackstone's high market capitalization are its technology investments and leadership in private credit. Although Blackstone might look overvalued on a relative basis, on an absolute value Blackstone is still intrinsically undervalued, according to Wolfteam Ltd.'s projections and estimates. CVC is also intrinsically undervalued.

CVC And KKR Comparison

KKR's market capitalization is 124.12 billion USD, while CVC's market capitalization is 24.48 billion EURs. 

KKK has 638 billion USDs of assets under management, while CVC has 175 billion EURs of assets under management.

So measured on assets under management alone KKR seems overvalued relative to CVC. 

KKR, however is trading at a lower Price/Earnings multiple of 42.46 compared to CVC's Price/Earnings ratio of 53.92. In addition KKR pays a 0.50 % dividend yield, while CVC does not distribute dividends.

So on these metrics KKR looks fairly valued at 4.3 times CVC's market capitalization.

Both KKR and CVC are undervalued according to Wolfteam Ltd.' projections and estimates.

One of the reasons KKR is more valuable is the fact that that a larger proportion of its assets are invested in private equity and private credit. In addition KKR's private equity and credit strategies returned 14 % in 2024.

Bitcoin Mining Drives AI. And AI Stocks Respectively

 

To mine Bitcoin one needs extensive computer resources. Basically, one needs the same computer chips that feed artificial intelligence, AI computing. So in fact, Bitcoin mining drives to a large extent AI computing and AI computer chips production.

The US President Donald Trump and the US administration are very friendly towards Bitcoin. Bitcoin's price could top 200 000 USD in 2025, according to Wolfteam Ltd.'s projections and estimates.

Such a development would bode very well for artificial intelligence, AI computing chips production and will support the market capitalizations of companies like NVIDIA and Broadcom.

Ares Management Corp Valuation

 

Ares Management Corp. or Ares, the private credit and private equity alternative asset management leading global firm is undervalued, according to Wolfteam Ltd.'s projections and estimates.

Ares' intrinsic worth is 82 billion USD, compared with Ares' current market capitalization of  59.59 billion USD, in Wolfteam Ltd.'s view.

Private credit is in a boom phase driven in part by lending to expanding technology companies, packaging loans into Collateralized Debt Obligations and other credit derivative securities. Most of Ares' 484 billion USDs of assets under management are in private credit and Ares benefits handsomely from the private credit boom. Private credit booms due to the reach of yield of pension funds looking to fulfill pension fund promises to retirees, insurance companies trying to cover future insurance events and increase profits and endowment reaching for extra income. On top of that many individual investors are looking for additional credit yield above US treasuries in their portfolios. And Ares Management Corp benefits hugely from strong investor inflows into its private credit funds. Only in 2024 Ares raised as much as 93 billion USDs of new funds.

Ares recently reported fourth quarter and full year 2024 results:

'GAAP net income attributable to Ares Management Corporation was $177.3 million for the quarter ended December 31, 2024. On a basic and diluted basis, net income attributable to Ares Management Corporation per share of Class A and non-voting common stock was $0.72 for the quarter ended December 31, 2024.

After-tax realized income was $434.7 million for the quarter ended December 31, 2024. After-tax realized income per share of Class A common stock was $1.23 for the quarter ended December 31, 2024. Fee related earnings were $396.2 million for the quarter ended December 31, 2024.'

“During 2024, we set many financial records, including our best year ever in gross fundraising and capital deployed. We raised $93 billion of new funds in 2024 and ended the year with $484 billion of AUM,” said Michael Arougheti, Chief Executive Officer of Ares. “We continued to expand our investment platform, diversify our distribution channels across institutional, wealth and insurance and generate compelling investment performance for our investors. As we head into 2025, we are optimistic that we are entering into a more active transaction environment which should create more investment opportunities for our platform.”

“With a record $95 billion of assets under management not yet paying fees, we are well positioned to invest opportunistically across a broad range of our strategies for investors and to drive continued strong growth in our key financial metrics over the next several years,” said Jarrod Phillips, Chief Financial Officer of Ares. “We are making excellent progress on GCP International and we now expect the transaction will close in the first quarter. We believe the GCP International business we are acquiring is well positioned and we expect progress on a number of new fundraising initiatives this year.” 

In short, Ares is on a high growth trajectory in a booming market for private credit. And its stock market capitalization is yet to unlock tens of billions of USDs of value.

AI Stocks Are Undervalued. DeepSeek Used Distillation Technique. Which Will Only Increase Future AI Data Spending

 

AI stocks remain undervalued in the long-term, according to Wolfteam Ltd.'s projections and estimates.

DeepSeek, when developing its very low cost R1 artificial intelligence, AI chat bot used the so called distillation technique. Which basically means DeepSeek first learned first hand from the answers of OpenAI's ChatGPT and Google's Gemini AI chat bots to develop the shocking high-scale capabilities rivaling ChatGPT at fraction, 6 % of the cost of 100 mln. USD used to build ChatGPT-4.

Distillation is a uniquely clever way to learn from the leading AI model chat bots on the planet. It saves costs and produces great results rivaling Gemini and ChatGPT artificial intelligence, AI chat bots. That said however, distillation is a way of reproducing answers. It is still valid that the one company that invests in cutting edge AI technology like data centers will lead the way.

In short, the AI race with the most powerful data centers, supercomputers with gigantic RAM memory is just starting. The companies at the cutting edge will win the AI, artificial intelligence race.

Private Credit Is In A Boom Phase

 

Private credit comprising making loans and underwriting CDO, CLOs etc. is in a boom phase.

The leading alternative asset management companies like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. stand to benefit enormously from managing money in private credit funds.

The loans they make are packaged by banks and sold on making even greater returns for investors. Barring a black swan event private credit's boom will continue in the next few years, according to Wolfteam Ltd.'s projections and estimates.

Simply the reach for yield of institutional investors is very strong.

AI Stocks Will Recover

 

NVIDIA, Broadcom, Intel, Qualcomm and other artificial intelligence graphical processing units, computer processing units stocks could fall further, 30 % + from their recent peaks, but they will recover in 2 years, according to Wolfteam Ltd.'s projections and estimates.

Artificial intelligence, AI is a disruptive force, the fourth industrial revolution and will continue to transform all business sectors. NVIDIA, Broadcom, Intel, Qualcomm and other artificial intelligence graphical processing units, computer processing units still hold a lot of unlocked value in the long-term.

Internet of things could be the next driving force for AI. The DeepSeek moment ensures that artificial intelligence, AI model building capabilities will transcend from huge data centres costing billions of USDs now to supercomputers, than powerful computers in large corporations, than powerful PC machines in small and medium enterprises, than finally to personal computer workstations and in end effect ot smartphones.

Smartphone and personal computer chip manufacturers and designers like Apple Inc and Samsung stand to benefit from the proliferation of AI and artificial, AI becoming ubiquitous.

CVC Valuation

 

CVC Capital Partners or CVC, the European private equity and alternative investments giant is undervalued, according to Wolfteam Ltd.'s projections and estimates.

CVC's intrinsic value is 34 billion USD, compared with CVC's current market capitalization of 23.99 billion USD, in Wolfteam Ltd.'s view.

For the first half of 2024 CVC made 704.954 million USD of revenue:

Pro forma statement of profit or loss (€ 000) Jun-24 Jun-23
Management fees 505,204 448,777
Carried interest and performance fees 108,056 89,569
Investment income 89,961 54,313
Other operating income 1,733 1,422
Pro forma total revenue 704,954 594,081
Personnel expenses (210,077) (188,672)
General and administrative expenses (113,240) (80,501)
Change in valuation of forward liability (209,420) (58,762)
Other expenses (2,818) 1,789
Pro forma EBITDA 169,399 267,935
Adjusted pro forma total revenue1 (€ 000) Jun-24 Jun-23
Pro forma total revenue 704,954 594,081
Less: Investment income attributable to NCI (37,608) (11,327)
Less: FX on carried interest provision (5,399) 3,972
Less: Performance-related costs (41,380) (37,924)
Adjusted pro forma total revenue 620,567 548,802
Adjusted pro forma EBITDA1 (€ 000) Jun-24 Jun-23
Pro forma EBITDA 169,399 267,935
Add back: Change in valuation of forward liability 209,420 58,762
Add back: Other APM adjustments 10,817 9,502
Adjusted pro forma EBITDA 389,636 336,199

Private equity and private credit are in a boom phase and CVC is a leader in private markets globally.

CVC raised the largest fund globally with 26.8 billion USD of assets.

CVC still holds a lot of unlocked value.

Private Equity Firms And The DeepSeek News

 

Many of the largest private equity giants like Blackstone, KKR, Apollo, Carlyle, CVC have invested large part of their private equity assets under management in technology firms. So they were affected by this Mondays, the 27th of January more than 3 % fall in the Nasdaq Composite and 17 % fall of the leading AI stock NVIDIA.

In the mid-term, however, private equity giants like Blackstone, KKR, Apollo, Carlyle, CVC will not suffer steep losses. The demand of artificial intelligence, AI computer chips is not likely to abate or lessen. Technology stocks will continue to go higher and private technology firms' values will increase in the mid-term, according to Wolfteam Ltd.'s projections and estimates.

Artificial intelligence, AI simply is too much a transformational force to be stopped by not so transformational event as DeepSeek. Yes, newer artificial intelligence, AI models will require most likely much less computing power and be cheaper. But that only will increase the penetration of artificial intelligence, AI to corporation, not technological, small and medium enterprises and ultimately to consumers who will be able to produce artificial intelligence, AI chat bots and tweak artificial intelligence, AI models on their personal computers, laptops and their smartphones even.

So private equity giants like Blackstone, KKR, Apollo, Carlyle, CVC stand to benefit in the long-term from the DeepSeek event as the value of the technology firms in their portfolios rises on AI in the mid-term.

In the long-term there will be the inevitable fall of technology stocks prices measured by more than 60 % of the Nasdaq, but for now the AI revolution is in full swing.

DeepSeek, ChatGPT And AI Analysis. Apple and Samsung Are Winners In The Current Situation

DeepSeek announced recently a chat bot similar to ChatGPT that matches ChatGPT's performance.

DeepSeek's chat bot however cost 6 million USD to produce, while ChatGPT's 4.0 last version chat bot cost 100 million USD to create.

On this piece of news over the weekend yesterday, Monday, the 27th of January NVIDIA, the largest GPU manufacturer for artificial intelligence, AI tumbled 17 % for Monday, other AI chips  manufacturers' stock prices and market capitalization like Broadcom fell 16 % or even more. Energy producers. the market capitalization of which grew a lot in the last rolling year on expectations they will have much new business feeding energy to the artificial intelligence, AI computation data centers like GE Vernova fell also by around 20 % yesterday.

In short, there seems to be a huge downward reassessment on how much will it cost to produce artificial intelligence, AI computing. The Chinese with DeepSeek, if the news are true 100 % have shown that producing artificial intelligence, AI run applications is only 6 % of the cost or many times lower than previously thought.

NVIDA Inc, the poster child of the artificial intelligence, AI felt this reassessment most acutely, since companies like Meta, Microsoft, Apple, Amazon, Alphabet were lining up until last Friday to purchase NVIDA GPUs for artificial intelligence, AI at very high prices ensuring a close to 40 % net profit margin for NVIDIA.

Now the market seems to have reassessed downwards the profitability of NVIDIA, Broadcom and other artificial intelligence, AI chips producing companies, driving down their future Price/Earnings ratios and this lowering significantly their current value.

NVIDIA, Broadcom could fall more than 30 % from their recent peaks, according to Wolfteam Ltd.'s projections and estimates, before staging a recovery. Yes NVIDIA's market capitalization could recover and even grow in 1 year. Why? Simply because DeepSeek feat has shown that artificial intelligence, AI computation is significantly cheaper, not that AI computing total demand slow. On the contrary, new, cheaper artificial intelligence, AI computer chips that produce cutting edge artificial intelligence, AI will broaden the market giving corporations, small and medium enterprises, startups and ultimately consumers with personal computers access to the most advanced artificial intelligence, AI computational capabilities.

A huge beneficiary of the current situation is Apple, in Wolfteam Ltd.'s view. The broadening of artificial intelligence, AI applications computational capability to corporations, small and medium enterprises, startups and ultimately consumers will drive more demand for Macintosh computers, iPhones, iPads on which one will possibly be able to do on premise artificial intelligence, AI, applications high grade computing.

Samsung is another potential beneficiary with its broad palette of mobile phones, computers and tablets.