CVC and AI

CVC Capital Partners PLC, or CVC one of the largest European and global private equity, real estate and private credit asset management firms can reach 144 billion USDs of market capitalization if artificial intelligence, AI lives up to the current forecasts of Wall Street research analysts, investors and Silicon Valley technologists and investors, according to Wolfteam Ltd.'s projections and estimates.

CVC, along with the other leading private equity companies Blackstone, KKR, Apollo, Carlyle, Ares, etc. invests a large part of its raised funds in artificial intelligence, AI related AI data centers and related AI technology companies.

In addition, CVC is very profitable, posting net profit margin of 30 % + in the last four reported quarters.

Private equity in its essence is a leveraged equity investment with borrowed debt. AI and technology is an operationally leveraged investment. All this makers for a magnified effect of profits if private equity investments turn out to be profitable. And profitability begets profitability.

So, in short if AI changes our world as profoundly as Wall Street research analysts, investors and Silicon Valley technologists and investors currently forecast, this would make up for very profitable business for CVC. 

AI technology deals for CVC will increase in count, as in 2021 was evident in the last technology boom, AI deals will beget deals not only for CVC, but for Blackstone, KKR, Apollo, Carlyle, Ares, etc. And CVC's profitability will drive tens of billions of USD in market capitalization value for CVC, according to Wolfteam Ltd.'s projections and estimates.

However, if the current overly optimistic forecasts for AI don't turn out to be correct, US and global stock markets could fall more that 52 %, and CVC, being a leveraged investment in nature could fall even more. 

 

How To Value Private Equity Firms' Investments In AI?

 

Blackstone, KKR, Apollo, Carlyle, Ares, CVC, etc., the leading private equity, real estate and private credit asset management firms are investing more than 32 % of their new funds' assets in artificial intelligence, AI data centers companies, AI technology companies shares and loans to AI technology companies, according to Wolfteam Ltd.'s estimates.

Private equity firms tend to value firms on Earning Before Interest Taxes and Depreciation, EBITDA multiples. Wolfteam Ltd.'s corporate opinion is in agreement with the late great investor Charlie Munger that EBITDA is not a very good approximation for profitability. Especially, given the fact that data centers are depreciated on a 20 year time schedule by the hyperscalers Amazon, Microsoft, Alphabet, Meta and other technology firms. 

A much better measure would be the common Price/Earnings ratio. If artificial intelligence, AI's companies Price/Earnings ratio exceeds 55, this could be deemed a bubble, according to Wolfteam Ltd.'s projections and estimates.

A Price/Earnings ratio of 55 for an AI technology company would incorporate 20 %  yearly revenue growth, with net profit margins exceeding 17 % per year and US GDP growth of 5.7 % per year for the next 15 years. Which is simply a low probability assumption, according to Wolfteam Ltd.'s estimates.

At What Level Would The AI Boom Be Deemed A Bubble?

 

If the trailing Price/Earnings ratio on average for all the companies in the Nasdaq Composite surpasses 55, the artificial intelligence, AI technology boom can start showing signs of a bubble, according to Wolfteam Ltd.'s projections and estimates.

Currently the Nasdaq Composite Price/Earnings ratio is 27.72.

If the Nasdaq Composite Price/Earnings ratio exceeds 55 then the embedded growth expectations would require something like 5-6 % US annual GDP growth for the next 20 years, the largest public technology companies earnings growing by 15 % for 20 years and their net profit margin being above 22 % for the next 20 years to substantiate a Nasdaq Composite Price/Earnings ratio of 55, according to Wolfteam Ltd.'s projections and estimates. 

What Could Stop The Investments In AI Data Centers?

 

Microsoft, Amazon, Alphabet and Meta are planning to invest more than 100 billion USDs a quarter in artificial intelligence, AI data centers and the accompanying infrastructure in the next 3 years, according to public data and statements.

Currently, the Large Language Models(LLMs) powering the leading chat bots ChatGPT, Gemini and LLAMA are requiring huge amounts of computing power. If suddenly, chat bots start requiring much less energy to produce computing answers, this could decrease suddenly the investments in AI data centers by more than 80 % from current levels, according to Wolfteam Ltd.'s projections and estimates.

 If chat bots become more efficient or Large Language Models' shift from model training to inference, that is AI models start to use their own knowledge to make decisions, instead of relying on training, these both developments could reduce the huge demand for data centers.

Such an even was DeepSeek, the Chinese chat bot LLM which produced answers much more efficiently than the current chat bot LLMs.

For now, however with the current structure of LLMs, the need for computing power is bound to continue to grow and thus drive hundreds of billions of USDs investments a year in AI infrastructure.

One way, the system could fall apart is if the companies building out the AI infrastructure become too leveraged or indebted and crumble under their own debt burden. For now, such a scenario seems 3-5 years distant, according to Wolfteam Ltd.'s projections and estimates. 

 

Private Equity Firms Control 700 Billion USD In Life Insurance Assets

 

The largest Wall Street private equity firms like Blackstone, KKR, Carlyle, Apollo, Arres, CVC etc. now control 700 billion USDs in life insurance assets. The Wall Street take over of large part of the life insurance business, makes life insurance assets interwoven in the global financial markets fabric.

Life insurance companies in search of higher yielding assets often invest not a negligible part of their portfolios in Collateralized Loan Obligations, CLOs the underlying loans of which have been disbursed to higher risk borrowers in technology and other sectors often commanding interest rates of more than 10 %, according to Wolfteam Ltd.'s projections and estimates.

Many of these CLOs are also bought by the private equity arms of Blackstone, KKR, Carlyle, Apollo, Arres, CVC etc., which also on the other side disburse high yielding loans to risky borrowers in technology and other sectors thus commanding high interest rates of more than 10 %.

This kind of investments benefit the economy by supporting the technology companies which develop the AI infrastructure and thus drive the US GDP growth lately. The last figures show that large percentile of the US GDP growth is due to artificial intelligence, AI related investments.

On the other hand, however insurance being interwoven in the fabric of the economy means problems in one corner of the market or company could quickly spread and bring about a worldwide recession.

For now, however  the largest Wall Street private equity firms like Blackstone, KKR, Carlyle, Apollo, Arres, CVC etc. investments seem to be paying off by yielding high rates of return, which are plowed back to the pension funds and endowments which provide large part of the privater equity firms' assets under management.

 

What Could Stop The AI Rally?

 

The artificial intelligence, AI rally could stop if the hyperscalers Amazon, Alphabet, Microsoft, Meta and other large technology companies lie NVIDIA, Oracle start depreciating on a faster scale their investments in AI infrastructure or data centers, according to Wolfteam Ltd.'s projections and estimates.

As far as there is public information, Amazon, Alphabet, Microsoft, Meta, NVIDIA and Oracle are depreciating their artificial intelligence, AI data centers assets on a 20 year time scales.

If a company like NVIDIA and Alphabet makes a jump in the development of Graphical Processing Units and Computer Processing Units chips used for AI processing, this could cause the AI chips replacement cycle to fall to 5 years. This quickly render the AI data centers built by Amazon, Alphabet, Microsoft, Meta obsolete in several years instead of the current twenty years. Amazon, Alphabet, Microsoft, Meta together currently invest more than 100 billion USDs in AI data centers build out per quarter. If these data centers investments become quickly obsolete Amazon, Alphabet, Microsoft, Meta could lose in excess of 300 billion USDs per year.

Amazon, Alphabet, Microsoft, Meta are highly profitable each making 60 billion USDs or more in net profit per year. But if Amazon, Alphabet, Microsoft, Meta via AI data center deprecation start realizing more than 300 billion USDs in losses per year, this could make their market capitalization fall by more than 55 %. Such a development could drag the whole global stock market with the Nasdaq Composite falling more than 62 % from its current levels, the S&P 500 could fall more than 44 % and the Dow Jones Industrial Average could fall more than 38 % from their current levels, according to Wolfteam Ltd.'s projections and estimates.

The Chip Competition

 

There is news that Meta, Facebook's is in discussion to use some of the AI chips Alphabet, Google's owner is developing.

AMD and NVIDIA's stocks fell on the news. 

NVIDIA holds circa 95 % market share, 2 % NVIDIA and 3 % for the rest of Graphical Processing Units and Computer Processing Units for AI data centers.

There have long been reports that Alphabet is developing its own, custom AI chips. 

So the news that Meta made a multi billion USD AI chips order from Alphabet heats up the AI chips competition and could accrue trillions of USDs of future value on Alphabet if the company has created successful and well working AI chips, according to Wolfteam Ltd.'s projections and estimates.

 

Private Credit And AI

 

The recent bankruptcies of First Brands and Tricolor shook the circa 3 trillion USDs in assets private credit market, wherein the biggest players are the leading alternative investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. which invest in private equity, real estate and private credit.

Much of the investments from the last 10 years of the leading alternative investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. go in AI and private credit makes up for about 20 % to 30 % of their total investments. So the leading alternative investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. have heavily invested into lending via private credit to AI technology companies. Since much of the lending is via collateralization via Collateralized Loan Obligations, CLOs, Collateralized Debt Obligations, CDOs there is inherent leverage in those investments, which could magnify losses for the leading alternative investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc.

Some of the loans and junior tranches of CLOs, CDOs have disbursed loans to technology companies with 10 %, 12 % or even upward of 15 % interests. Yes, many of these junior tranches have been sold to other institutional investors, but the leading alternative investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. still end up holding much of the CLOs, CDOs in their assets under management and some even on their balance sheets.

So, if there is bust, following the current boom in artificial intelligence, AI, the leading alternative investment management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. market capitalization could sink more than 35 % from the current stock market lagging values due to their exposure to private credit, according to Wolfteam Ltd.'s projections and estimates. 

If, however, the AI boom continues,  Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. could end up outperforming the market again, according to Wolfteam Ltd.'s projections and estimates.

How High Can Amazon's Market Capitalization Go In An AI Positive Case?

 

If the overly optimistic forecasts of Wall Street research analysts, investors and Silicon Valley technologists and investors for artificial intelligence, AI come to fruition, Amazon's market capitalization could reach 10.5 trillion USDs, according to Wolfteam Ltd.'s projections and estimates.

The premise for such a forecast is that Amazon's revenue reaches 1.1 trillion USDs and its net profit reaches 90 billion USDs, in Wolfteam Ltd.'s view.

Amazon is the leader in cloud computing with 34 % market share. The global cloud computing market size was estimated at USD 752.44 billion in 2024 and is projected to reach USD 2,390.18 billion by 2030, growing at a CAGR of 20.4% from 2025 to 2030. 

Amazon is also the leader in ecommerce. The global ecommerce market is expected to total $4.8 trillion in 2025.  

Cloud computing ensures leadership for Amazon also in the artificial intelligence, AI data center build out race. Amazon's Q chat bot is not as popular as OpenAI's ChatGPT, Alphabet's Gemini or xAI's Grok, but much of the world's computing goes via Amazon's servers.

If AI changes the world profoundly, Amazon will most likely lead the change and its market capitalization will rise a lot, if artificial intelligence makes us all multiple fold more productive.

There is the risk that artificial intelligence, AI's boom could turn into bust, much like the Dot Com boom and bust during which Amazon's market capitalization fell circa 90 % from peak to trough. 

What Could Derail The AI Rally?

Despite the recent circa 7 % Nasdaq Composite fall, the AI boom and following stock market rally seem to be in full swing.

Several events could stop the AI boom in its tracks, which could be defined by the Dow Jones Industrial Average, Standard and Poor's 500 and Nasdaq Composite and other major global stock market indices falling more than 40 % from their recent peaks, according to Wolfteam Ltd.'s projections and estimates:

 1) Policy error by the Federal Reserve, which could be defined as raising the target Federal Funds Rate and thus the interest rate level of the US economy by more than 2.5 % in the next 2 calendar years

2) Recently cracks appeared in the private credit market where several multi billion loans to firms like First Brands and Renovo are trading at steep discounts. Since there is much securitization in private credit and many of the loans disbursed are to technology firms, more bankruptcies could cause broader financial trouble. Some of the loans made to borrowers in the private credit market have paid out interest rates of  up to 20 % to 30 %, which partially explains the ongoing for several years now private credit boom

3) Sudden reset of investor expectations for the now apparently bright future of AI. This could be caused by faster depreciation tables on the current Graphical Processing Units chips used in AI data centers

4) Sudden and large rise in the price of oil, which could trigger galloping inflation

5) Sudden technological breakthrough akin to the Chinese DeepSeek, which would reset downwards by multiple fold investors' expectation of the needed future  billions, if not trillions of USDs spend on computing power to build out AI data centers

For now, however the wall of money looking for higher return in AI related technology companies seems bound to drive the AI rally further, according to Wolfteam Ltd.'s projections and estimates. 

 

How Deep Will The Current AI Correction Be?

 

The Nasdaq Composite is down 7.57 % from its recent peak on 29th October 2025 in what could be called an AI correction.

NVIDIA, the technology stock leading the AI revolution is down 15.7 % in the same period.

The draw down in AI technology stocks is driven by the current huge spending on AI data centers build out, the probable future profitability of the largest technology companies, the expected policy of the Federal Reserve, the current valuations of the leading technology companies, namely Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla.

The Nasdaq Composite fell circa 35 % and NVIDIA fell circa 65 % in the 2021-2022 market rout which again focused on technology.

This time around the Nasdaq Composite could fall around 21 % from its 29 th October peak and NVIDIA's stock price could fall 40 % from its recent peak dragging along Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla, according to Wolfteam Ltd.'s projections and estimates.

The Nasdaq Composite will swiftly recover along with the rest of the market, though, in Wolfteam Ltd.'s view.

The current promise of AI driven to a large extent by the overly optimistic forecasts of Wall Street research analysts investors and Silicon Valley's technologists and investors is simply too great and will drive the stock market for years. AI could turn out to be a bubble, but the subsequent bust could create new world improving companies akin to Amazon, Alphabet, Google's owner and Meta, Facebook's owner which were created in the aftermath of the internet Dot Com boom and 77 % fall of the Nasdaq Composite bust.

How High Can Alphabet, Google Owner's Market Capitalization Go In An AI Positive Case?

 

If the current overly optimistic forecasts of Wall Street research analysts, investors and Silicon Valley technologists, investors for artificial intelligence, AI come true and AI ends up changing our world by improving greatly, multiple times our productivity Alphabet, Google owner's market capitalization could climb to 14.7 trillion USDs, according to Wolfteam Ltd.'s projections and estimates.

Alphabet's current market capitalization is 3.61 trillion USDs.  

Gemini, Alphabet's Large Language Model has 600 million  monthly active users and it is second only to OpenAI's ChatGPT Large Language Model with its 800 million monthly active users.

Large Language Models like Gemini and ChatGPT are essentially enhanced, improved search engines, for the moment at least. A Large Language Model needs data to train itself on and Alphabet, via its property search engine Google arguably has the most powerful and encompassing data base in the world. So Gemini potentially could end up to be the best trained Large Language Model. Which will benefit extremely Alphabet, Google's owner.

Because it is clear already that Large Language Models like ChatGPT, Gemini, xAI's Grok, Meta's LLAMA tend to monopolize the interest much like Yahoo, Google and Facebook did in their time.

So, if artificial intelligence, AI lives up to the current forecasts, it would not be surprising if Alphabet, Google's owner ends up with 14.7 trillion USD in market capitalization, according to Wolfteam Ltd.'s projections and estimates.

Meta and Microsoft, as the main shareholder in OpenAI could also end up being worth trillions of USDs more than their current market capitalization. xAI could also end up being worth more than a trillion USDs in value, according to Wolfteam Ltd.'s projections and estimates.

 

How High Can Apollo's Market Capitalization Go In An AI Positive Case?

Apollo Global Management, the leading private equity, real estate and private credit asset management firm could reach 450 billion USDs in market capitalization, if artificial intelligence, AI lives up to the current forecasts of many Wall Street research analysts, investors and Silicon Valley technologists and investors, according to Wolfteam Ltd.'s projections and estimates.

Apollo has invested large share of its private equity, real estate and private credit assets under management in AI technology companies, AI data centers and online merchandise infrastructure. Since only small part of Apollo's company investments are via equity and the much larger part is in debt, Apollo's AI investments are leveraged in nature. Add to this AI technology companies' operational leverage and if AI changes the world as profoundly as many Wall Street research analysts, investors and Silicon Valley technologists and investors think, Apollo's investments in AI gains will be multiplied and Apollo's value will increase multiple fold.

However, if the AI boom turns into a bust, Apollo's losses could be magnified as well.

In the short-term, it seems the AI boom will continue. But it has to lead to AI technology company profitability, if it is to have a lasting effect on the world, in Wolfteam Ltd.'s view.

 

How High Can Carlyle's Market Capitalization Go In An AI Positive Case?

 

Carlyle, the private equity, real estate and private credit asset management firm could reach 102 billion USDs in market capitalization if artificial intelligence, AI lives up to the current forecasts of Wall Street research analysts, investors and Silicon Valley investors and technologists, according to Wolfteam Ltd.'s projections and estimates.

This compares with Carlyle's current market capitalization of 19.28 billion USDs.

Carlyle, along with the other leading  private equity, real estate and private credit asset management firms invests heavily tens of billions of USDs in technology companies, artificial intelligence infrastructure like data centers and online merchandising delivery centers giving it leveraged exposure to artificial intelligence, AI since Carlyle finances only a portion with equity, most with borrowed debt via loans or bonds.

Carlyle's stock price has under performed lately and if artificial intelligence, AI continues booming, most probably Carlyle's market capitalization will start growing due to the leveraged nature of Carlyle's investments in AI. Carlyle is a leader in private credit and currently interest rates on loans to AI technology companies often exceed 12 % or even 15 % per year. Which turns private credit in a very profitable machine for Carlyle.

 

What If AI Turns Out To Be A Bubble?

 

If the current artificial intelligence, AI boom proves to be a bubble, the Nasdaq Composite could fall more than 81 % from its current level, according to Wolfteam Ltd.'s projections and estimates.

Currently, according to many metrics the Nasdaq Composite current level is almost at the level of the Nasdaq Composite at the height of the Dot Com bubble. From peek to trough at the 2000 Dot Com bubble and subsequent bust the Nasdaq Composite fell 77 %.

This time around, if the AI bubble bursts, the fall of the Nasdaq Composite could be a little bit worst, in Wolfteam Ltd.'s view.

It is true that the leading technology companies with more than 1.35 trillion USDs in market capitalization each, like NVIDIA, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla are extremely profitable, partially excluding Tesla due to its relatively low profitability. But Cisco and Microsoft were hugely profitable during the Dot Com boom also. In 2000 it turned out that that level of profitability was simply unsustainable. The leading technology companies in 2000 invested a lot in fiber optic infrastructure and the world needed decades to fully utilize that internet infrastructure.

It turned out that the technology giants in the 2000 boom over invested in internet technology infrastructure in the short-term, which hit their profits. But in the long-term, 10-15 years that over investment turned out good for society and the technology community.

Similarly now the hyperscalers Amazon, Alphabet, Microsoft and Meta are spending 100s of billions of USD per year in artificial intelligence, AI infrastructure. It may well turn out that in the short-run  hyperscalers Amazon, Alphabet, Microsoft and Meta are over investing, but in 10-15 years the AI infrastructure they are now building may be fully utilized.

In the worst case scenario, the graphical processing unites chips mainly NVIDIA manufactures in the current AI data centers could turn out to be obsolete in 5 years, replaced by newer, with far better technology GPU chips. Which will deprecate the value of the current AI data centers and hit the  hyperscalers Amazon, Alphabet, Microsoft and Meta with hundreds of billions USDs of losses.

Such a scenario at the moment has a probability of around 25 %, according to Wolfteam Ltd.'s projections and estimates.

If the AI dreams of robots everywhere, billions of robots serving humanity and AI data changing our lives, how produce and consume leisure come to fruition in the most optimistic scenarios of Wall Street research analysts, investors and Silicon Valley investors and technologists, NVIDIA, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla could prove grossly undervalued.

 

How High Can KKR's Market Capitalization Go On AI?

KKR, the leading private, real estate and private credit alternative asset manager could climb to 320 billion USDs in market capitalization value, if artificial intelligence, AI lives up to the current forecasts of many Wall Street research analysts, investors and Silicon Valley technologists, because KKR is a leading investor in AI data centers, online merchandise trading infrastructure and outright investments in AI technology growth and mature companies, according to Wolfteam Ltd.'s projections and estimates.

That compares to KKR's current 108.09 billion marker capitalization. 

KKR's revenue could climb from the current 16 billion USD on average for the last five years to 43 billion USDs on average on larger and bigger in numbers yearly deals in artificial intelligence, where much of the leading private, real estate and private credit alternative asset manager investments go currently via investments in AI data centers, online merchandise trading infrastructure and outright investments in AI technology growth and mature companies, according to Wolfteam Ltd.'s projections and estimates.

KKR could benefit from both its current exposure to AI and future increase of the value and number of deals involving artificial intelligence, AI companies.

AI's current boom could turn into a bust of course, but for the time being self perpetuating expectations and the higher revenues and profits of AI firms drive the AI boom and the flourishing of AI technology companies. 

 

 

How High Can Microsoft's Market Capitalization Go On Artificial Intelligence?

Microsoft's market capitalization could reach 11.5 trillion USD in 10 years if Artificial Intelligence, AI lives up to the current high expectations of Wall Street analysts, investors and Silicon Valley technologists, according to Wolfteam Ltd.'s projections and estimates.

Microsoft's current market capitalization is 3.67 trillion USD.

In 10 years time Microsoft's revenue could reach 500 billion USD and with the current net profit margin of 36 % this would make for a net yearly profit of 180 billion USD, in Wolfteam Ltd.'s view. Even at such revenue and profit a possible future Microsoft market capitalization of 11.5 trillion USD will make for circa 64 Price/Earnings ratio which still makes up for a significant future growth.

AI could still yet prove a bubble, but in the mean time the leading technology companies could reach stratospheric values in market capitalization. 

 

 

 

How High Can Apple's Market Capitalization Go In An AI Positive Case?

 

Apple's market capitalization could reach 18 trillion USDs if AI reaches its full potential and transforms society as forecast currently by many Wall Street research analysts, investors and Silicon Valley technologists.

That compares to Apple's current market capitalization of 4.01 trillion USDs. 

Apple would have to report 700 billion USDs in annual revenue and 180 billion USD in annual profit in 10 years to justify 18 trillion USDs market capitalization, according to Wolfteam Ltd.'s projections and estimates.

The main driver of such a revenue increase will be iPhone, Macintosh and iPad sales, which would be one of the main carriers of the current artificial intelligence, AI revolution, if AI lives up to its current hype.

 

 

 

How High Can Blackstone's Market Capitalization Go In An AI Positive Case?

 

Blackstone Inc, the leading private equity, real estate, private credit alternative asset manager along with the other KKR, Apollo, Carlyle, Ares,  Blue Owl, CVC, etc. leading private equity, private credit, real estate alternative asset managers is at the forefront of investing, investments in artificial, AI.

If artificial intelligence, AI lives up to the current of most Wall Street research analysts and investors estimates to 80 %, that Blackstone's market capitalization, as the leading alternative asset manager investing in AI, could rise to 1.1 trillion USDs in 5 to 7 years, according to Wolfteam Ltd.'s projections and estimates. 

That compares to Blackstone's current market capitalization of circa 175 billion USDs. 

Blackstone, KKR, Apollo, Carlyle, Ares, CVC, Blue Owl Capital, etc. leading private equity, private credit, real estate alternative asset managers invest large portion, usually more than 35 % of their newly raised and existing funds in artificial intelligence, AI infrastructure like data centers, energy companies.

Just recently, Meta, Facebook's owner announced a 30 billion data center financing bill with Blue Owl Capital .

It is expected that such data center financing structures will proliferate in the future.

Blackstone is expected to remain the largest and leading institutional investor in artificial intelligence in AI, which sooner or later will be reflected in its market capitalization, in Wolfteam Ltd.'s view.

If AI reaches only 30 % of its current estimated potential, Blackstone's market capitalization could fall to 120 billion USD, a circa 30 % of Blackstone's current market capitalization. The fall would be cushioned by Blackstone's portfolio current investments, which are rich cash flow positive and large dividends yielding.

 

How High Can NVIDIA Stock Market Capitalization Go?

 

Currently, the market for AI graphical processing units chips is estimated by various Wall Street analysts to grow to 400 billion USDs by 2029.

NVIDIA controls between 70 % and 95 % of the market for market for AI chips used for training and deploying AI models.

So, If NVIDIA keeps its current market share and reaches 400 billion USD in annual sales by 2035 and one applies the current Price/Sales ratio of circa 30 and increases it to 43, NVIDIA's market capitalization could reach 17.2 trillion USD in the very optimistic case that AI lives up to circa 75 % of its current estimated by Wall Street research analysts and investors potential, according to Wolfteam Ltd.'s projections and estimates.

If, however artificial intelligence, AI's potential lives up only to 30 % of the current estimates, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite indices could fall by 53 %, 64 % and 80 % from their recent peaks.

NVIDIA's market capitalization in AI living up to only 30 % of its potential case could fall 84 % from its recent peak to 714 billion USDs, according to Wolfteam Ltd.'s projections and estimates.

 

AI Valuation Multiples

 

For developed AI hyperscalers Price/Earnings of 40 and Prices/Sales of 7 to 10 seem adequate, according to Wolfteam Ltd.'s projections and estimates.

For fast growing startup AI companies Price/Earnings of 200 to 300 and Prices/Sales from 20 to 40 seem to capture adequately the possible long-term growth, in Wolfteam Ltd.'s view.

Where Will The AI Hyperscalers Get The Funds For AI Data Centres? Private Equity Could Help

 

Alphabet, Meta, Microsoft and Amazon have each announced intentions to invest hundreds of billions of USDs in artificial intelligence, AI infrastructure, computing data centers that is.

Alphabet has around 95 billion of USDs in cash, Meta has around 47 billion USDs in cash, Microsoft has close to 95 billion USDs in cash and Amazon has close to 93 billion USDs in cash on their balance sheets according to public data.

So the question is where Alphabet, Meta, Microsoft and Amazon will get the hundreds of billions of USDs in funds to build out AI data centers.

In the last weeks Meta announced a 27 billion USDs joint venture with Ares, the private credit, private equity and real estate asset management company.

This could be where the hypercalers Alphabet, Meta, Microsoft and Amazon will look for the needed AI compute funds. Basically, they will use private equity, private credit's firm dry powder capital of 2 billion USDs for investing to raise the money. The leading private equity companies will most likely raise new fund vehicles to finance the AI boom.

In short, the artificial intelligence, AI boom investing will continue for the time being, in Wolfteam Ltd.'s estimates. 

Will Private Equity Firms Continue To Invest In AI?

 

Private equity firms will most probably continue investing in artificial technology, AI firms and AI data centers due to fear of missing out and not beating the S&P 500, according to Wolfteam Ltd.'s projections and estimates.

Technology and AI based technology in particular is what has worked since 2013. In the first years since 2013 it was the smartphone, after 2015 came cloud computing, but both the smartphone and the cloud computing and storage revolution are driven by algorithms and artificial intelligence, AI models which underlie them. 

According to many Wall Street equity and fixed income research analysts and investors, the leading private equity firms Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. will go on financing the AI boom, in order not to miss out on outperforming the S&P 500, the Dow Jones Industrial Average, the Nasdaq Composite and to go on fulfilling the promises they made to their Limited Partnerships investors.

Private equity firms need constant incoming cash flow and deal flow to return money to their Limited Partnerships investors. Artificial intelligence, AI technology firms lack dividends cash flow, but they provide for dynamic deal flow, which suits private equity firms, which finance heavily the fourth industrial revolution or artificial intelligence, AI and its profound change effect on our everyday life. 

Private Equity Funds Still Value AI Firms Too Conservatively

 

Private equity firms, influenced by their usual workflow value artificial intelligence, AI technology firms still a bit conservatively.

Private equity firms tend to look more at the past performance of mid-sized AI technology firms, that their possible future revenue and net profit growth paths, according to Wolfteam Ltd.'s projections and estimates

This is because private equity firms have to constantly return money to investors due to their funds' maturities mismatch. Private equity firms have to constantly do deals, which makes them value AI tech firms too low for the path breaking nature of artificial intelligence, AI, in Wolfteam Ltd.'s view. 

Hyperscalers Valuation. Alphabet, Microsoft, Amazon, Meta and Apple

Hyperscalers are computing companies that provide large computing resources as computing power, storage, AI, artificial modelling or statistical modelling and provide extreme scalability to accommodate workloads at massive scales.

Alphabet, Microsoft, Amazon, Meta and Apple, the leading artificial intelligence, AI hyperscalers are all valued into more than 1.5 trillion USDs each. These are staggering amounts of money, each more than the GDP of any economy outside the 7 largest economies like USA, China, Germany, Japan, UK, France, Canada, Italy and even some more.

Are the leading artificial intelligence, AI hyperscalers Alphabet, Microsoft, Amazon, Meta and Apple overvalued? No, according to Wolfteam Ltd.'s projections and estimates.

How to value the hyperscalers.? First, global GDP is 111.25 trillion USDs. Global financial assets are 305 trillion USDs according to the Boston Consulting Group report. Taking into account these macroeconomic figures and the revenue and profit reported by Alphabet, Microsoft, Amazon, Meta and Apple and extrapolating future growth and profitability, based on the current fundamentals and competitive advantages of Alphabet, Microsoft, Amazon, Meta and Apple, the AI, artificial intelligence hyperscalers, Alphabet, Microsoft, Amazon, Meta and Apple could be valued at 8 trillion USDs for Alphabet, 5.9 trillion USDs for Microsoft, 4.3 trillion USDs for Meta, 6.3 trillion USDs for Amazon and 7.1 trillion USDs for Apple according to Wolfteam Ltd.'s projections and estimates.

All these tens of trillions of USDs of value are driven by the fourth industrial revolution of artificial intelligence, AI, which will enhance greatly our productivity, provide us with better leisure, increase our well being and ultimately help us live better lives. There will be intermediate hyper booms and subsequent busts of trillions of USDs of created and subsequently destroyed value, which will characterize the current artificial intelligence, AI wave in Wolfteam Ltd.'s view, but ultimately artificial intelligence,AI should keep changing our lives and creating huge wealth in the process.

 

AI Data Centres Are Private Equity Firms Hottest Investment

 

Blackstone, KKR, Apollo, Carlyle, Ares, CVC, etc., the largest private equity firms are investing en masse in artificial intelligence, AI data centers and online merchandise trade distribution centers.

Apparently, the largest private equity firms bet on the AI boom continuing and changing profoundly our world. Yes, AI is the fourth industrial revolution, but artificial intelligence, AI's progress will be slower and more gradual with many mid-sized booms and busts than many investors and analysts assume, according to Wolfteam Ltd.'s projections and estimates.

Private equity and private credit firms sometimes invest in technology firms with Price/Sales ratios of 10 or more or Price/Earnings of 43 or more. Such technology firms investments could prove too volatile for the institutional capital, private equity fund managers manage, in Wolfteam Ltd.'s view. At least in the concentration they are doing it.

But for now the AI boom seems to go on. 

OpenAI Deals With NVIDIA, AMD And Oracle

 

OpenAI has in the recent days announced circular deals with NVIDIA and AMD where the seller in fact finances the buyer to buy their products, akin to the circular lend-to-buy deals during the peak of the dot com boom, which fed the internet boom and contributed to its subsequent bust, according to many investors and analysts.

NVIDIA for example will invest up to 100 billion USD in OpenAI, with which OpenAI basically will turn around and buy NVIDIA graphical processing units, which will power to be built in the future OpenAI AI data infrastructure centers. 

In addition AMD and OpenAI in the last week announced a deal which could see AMD getting tens of billions of USDs in value of computer processing units and graphical processing units chip units orders and in exchange OpenAI could end up owning up to 10 % of AMD's stock, if AMD's stock hits certain targets. 

What is more, OpenAI signed a 300 billion USD in future revenue deal for Oracles in exchange for 4.5 gigawatts of additional Stargate project capacity.

The OpenAI NVIDIA and OpenAI AMD deals seem somewhat similar to the lend-to-buy deals that many technology companies concluded in the dot boom and bust era, which basically are technology companies lending potential buyers money to finance purchasing their services and products.

The money that Open AI will receive from AMD and NVIDIA is scheduled to flow back into AMD and NVIDIA to purchase graphical processing units chips, which will power data centers for the OpenAI, Oracle and SoftBank planned Stargate storage capacity infrastructure for artificial intelligence, AI which is supposed to cost around 500 billion USDs.

Basically, such transactions could go along, as long as the artificial intelligence, AI data boom keep going. If artificial intelligence does not live up to its current expectations, we could experience another technology bust, which could see the Nasdaq Compsite falling more than 55 % from its peak and many flagship companies could go out of existence, according to Wolfteam Ltd.'s projections and estimates.

But for now, artificial intelligence, AI is set to change every industry we know by expanding the business' productive capability and enhancing human potential by helping us produce more, rest more, enhance our wealth more and in effect live better lives lead by the fourth industrial or artificial intelligence, AI revolution, in Wolfteam Ltd.'s view. 

Private Equity Deals Will Recover

 

Private equity deal making will soon recover, according to Wolfteam Ltd.'s projections and estimates.

Private equity has close to 2 trillion USDs of dry powder or capital for deals.

The largest private equity firms have so far preferred to do deals in artificial intelligence, AI, IT related sectors like data centers infrastructure or energy or online merchandise related deals like delivery centers.

That said, many other sectors are getting less capital and are now undervalued, according to Wolfteam  Ltd.'s estimates.

Utilities, commodities, industrials, partly energy are some of the dividend yielding, undervalued sectors, which could prove of interest to private equity.

Especially if the AI boom slows down.

In short, private equity has a whole universe of good yielding assets to choose from outside artificial intelligence, AI where most of private equity assets and deal making has been flowing into. 

Robinhood Markets Valuation. Comparison With Goldman Sachs And Morgan Stanley

Robinhood Markets Inc, the US based stocks, options and cryptocurrencies brokerage is undervalued, according to Wolfteam Ltd.'s projections and estimates.

Robinhood Markets' intrinsic value is 174 billion USD compared to Robinhood Markets' current market capitalization of 132.12 billion USDs.

Robinhood Markets verticals of growth, namely stocks trading, options trading, cryptocurrencies trading, social trading and artificial intelligence could bring Robinhood Markets to 12 billion USDs in annual revenue, compared to the current 3.4 billion USDs trailing annual revenue and with net profit margin of around 25 % to 3 billion USDs in annual profit compared with the current 1.8 billion USDs of trailing annual profit, according to Wolfteam Ltd.'s projections and estimates.

In addition, Goldman Sachs and Morgan Stanley are undervalued at circa 250 billion USDs of market capitalization of each. Goldman Sachs and Morgan Stanley's intrinsic values are closer to 400 billion USDs each, according to Wolfteam Ltd.'s projections and estimates. 

In short, the US brokerage industry is yet to grow into its current full potential, in Wolfteam Ltd.'s view. 

Why Private Equity Asset Raising Has Stalled?

 

In the last two years leading private equity, private credit, real estate asset management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC, etc. have encountered certain difficulties in raising new capital.

They have either raised lower than planned new funds or stopped raising capital for some funds, whatsoever.

The reason is twofold, according to Wolfteam Ltd.'s analysis.

The leading private equity, private credit, real estate asset management firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC, etc have invested large part of their assets under management in artificial intelligence, AI related investment themes like data centers, infrastructure, energy production and online merchandise assets like distribution centers. Many market analysts and investors seem to think that the AI trade is satiated and we may be at or close to a bubble, which stalls any new investments to AI, which hurts the private equity firms.

In addition, many investors in private equity funds like pension funds, endowments and insurance companies have hit their limits to the sector. This also suppresses new investments to private equity firms.

That said, private equity, real estate and private credit asset management firms remain a hot investment sector.

 

 

What Could Derail The Stock Market Rally?

 

The US stock market rally could be stopped in its tracks by a policy error on the part of the Federal Reserve, sudden realization of investors that stocks are way overvalued or regulations that could force banks to account for some assets in a different way.

A fourth reason is trouble in the shadow banking sector, in private equity, private credit and real estate that is, according to Wolfteam Ltd.'s projections and estimates.

All these reasons for a stock market crash seem far away, but the probability of them happening is non-negligible at about 10 % to 20 %. With sudden geopolitical events able to raise this probability markedly.

Why Private Equity Companies Are Underperforming The Market?

 

The main reason private equity stocks are under-performing the S&P 500 in the last 5-7 months is the high concentration of private equity firms' investments in artificial intelligence, AI data centers, delivery centers and other infrastructure, according to Wolfteam Ltd.'s projections and estimates.

The leading private equity firms like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. have invested via their private equity, real estate, private credit assets under management heavily and also often in a leveraged way in artificial intelligence, AI.

And the recent AI stock market correction caused a disproportionate fall in the leading private equity firms' stocks, which have not recovered as the AI firms' stocks did.

The main reason for this development is the leveraged nature of  Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc.'s investments.

Most probably, however in time the private equity firms' stocks could recover more strongly than the market due again to their leveraged nature.

 

 

 

Private Equity Assets Under Management Growth

 

The growth of private equity firms' assets under management has stalled in the recent months, prompting poor performance of the leading private equity firms' stocks like Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. compared to the general indices Dow Jones Industrial Average, S&P 500, Nasdaq Composite.

The slowing pace of asset gathering of the leading Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. private equity, private credit, real estate firms could be due to two factors mainly, according to Wolfteam Ltd.'s projections and estimates.

First, there could be doubts in the further growth of the artificial intelligence, AI technology, which could reflect fears of a stock market bubble. Second, the growth of assets under management of the largest private equity firms Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. was so steep, that a moderation was in order.

AI is relevant for private equity as large part of private equity firms' investments goes into artificial intelligence, AI data centers, infrastructure and computing power. 

In short, the current slowdown of private equity assets under management is most probably temporary, barring a sudden stop of the AI boom.

 

Are We In An AI Stock Market Bubble?

 

There are publications by Wall Street equity research analysts that the Price/Book ratio of the S&P 500 is 5.3, a bit above the S&P 500's Price/Book ratio during the height of the dot com bubble and the subsequent bust.

No. We are not in an artificial intelligence, AI bubble, yet, according to Wolfteam Ltd.'s projections and estimates.

The current boom can last for 5-7 years more, before a subsequent large fall.

The profits of the technology firms and the investment capital flows could feed the current stock market rise for several years more.

 

Alphabet, Google Owner Is The Most Undervalued Of The Magnificent 7 AI, Technology Companies

 

Alphabet, the owner of the Google search engine is the most undervalued of the so called Magnificent 7 artificial intelligence, AI, technology stocks Apple, Microsoft, Alphabet, Amazon, Meta, Tesla and NVIDIA, according to Wolfteam Ltd.'s projections and estimates.

Alphabet's intrinsic worth is 10.4 trillion USD, according to Wolfteam Ltd.'s projections and estimates. compared to Alphabet's current market capitalization of 2.47 trillion USD.

Alphabet, via Google and its other properties simply possesses arguably the largest amount of data on the planet on which to train its models, Gemini including. And many professors and researchers say data is the new oil. Data feeds the models so they can produce better results.

Alphabet is still yet to monetize fully the gigantic terabytes of data it possesses. The competition from the new competitors in chat based search could be a catalyst for Alphabet to better use its data. Google is still an excellent search engine providing excellent results via which Alphabet gathers even more data.

All the other Magnificent 7 stocks in most cases still have much unlocked value, but not in the multiples Google has.

 

 

Private Equity Firms AI Technology Investments

 

Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. and other leading private equity firms invest predominantly in mid capitalization technology firms, technology firms with 2 to 10 billion USDs in market capitalization or private market value. Mega capitalization technology firms with market capitalization of above 20 billion USD are too big even for the biggest funds of Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. and other leading technology firms, it seems.

In 2008 we had an almost 80 billion USDs private equity leveraged buyout deal. Those boom times have not returned fully. The biggest leveraged buyouts now are to the tune of 40 billion USDs.

Technology companies can decline in value quickly, that is why Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. are wary of investing too large amounts in technology companies with market capitalization above 50 billion USD. When they do a mega deal or above 20 billion USDs, the leading private equity firms do it in consortium with other leading private equity firms to share the risk.

Sooner or later, there will be a 70 billion USDs or higher technology leveraged buyout, according to Wolfteam Ltd.'s projections and estimates.

Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. are still cautious because they manage foundations, endowments and pension funds' money.

However, there is tremendous value to the tune of tens or even hundreds of billions of USDs of value created in the technology space, related in many cases to artificial intelligence, AI occurring every year since 2014. Such value creation opportunities could prove too tempting for Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. other leading technology firms in the long run.

 

Are We In An Artificial Intelligence, AI Bubble? Hyperscalers, Magnificent 7 Technology Companies CAPEX Outlays

 

The short answer is yes. We are living in an AI driven stock market and assets bubble. The long answer is the AI bubble could go on inflating for 5-7 years more, according to Wolfteam Ltd.'s projections and estimates.

One of the latest signs of the AI bubble are the 50 mln. USD, 100 mln. USD and even 100 mln. USDs yearly pay packages Mark Zuckerber, Meta's founder and CEO is offering in personal meetings so called leading AI engineers. 

Another sign is the 70 billion USDs capital expenditures in AI data centers Meta and the 100 billion USDs CAPEX in AI related infrastructure Microsoft is planning. On top of that Alphabet, the Google's owner is planning 85 billion USDs in capital expenditures on AI data center infrastructure.

Amazon's expenditure on servers and data centers to support AI could come up to to 118 billion USD in 2025 alone.

The big four so called hyperscalers Microsoft, Alphabet, Amazon and Meta are about to spend 400 billion USDs on capital expenditure related to artificial intelligence, AI in the coming year.

'Microsoft plans to unload about $100 billion on AI in the next fiscal year, CEO Satya Nadella said Wednesday. Meta plans to spend between $66 billion and $72 billion. Alphabet plans to spend $85bn, significantly higher than its previous estimation of $75bn. Amazon estimated that its 2025 expenditure would come to $100 billion as it plows money into Amazon Web Services, which analysts now expect to amount to $118bn'

Apple, on the other hand seems to the most viable investment alternative from the Magnificent 7 technology companies Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla in valuation viewpoint, as Apple has largely avoided large AI CAPEX and generates far more in sales and profits from capital outlays than the four AI technology hyperscalers Microsoft, Alphabet, Amazon and Meta.

 The four hyperscalers AI technology companies want to satisfy Wall Street equity research analysts' desire for higher artificial intelligence, AI spending with the predominant school of thought is that whichever company has the most powerful data crunching infrastructure will win the artificial intelligence, AI race and get to dominate the ever growing technology market.

All the above signs point that we are in an artificial intelligence, AI driven bubble, according to Wolfteam Ltd.'s projections and estimates. True, we may be living in the fourth industrial revolution driven by AI, but the capital expenditures of the four hypercalers and technology companies altogether are unsustainable for sales and profit, which will ultimately drive the long-term results of the technology companies. The artificial intelligence, AI bubble could be 5-7 years away from popping, in Wolfteam Ltd.'s view.

 

 

 

Private Equity And AI Infrastructure Investment

 

The leading alternative asset management firms with large private equity arms like Blackstone, KKR, Apollo, Carlyle, CVC have all invested heavily in data centers, energy firms and other artificial intelligence infrastructure.

Blackstone, KKR, Apollo, Carlyle, CVC do that by buying out via leveraged buyouts mid sized technology firms, giving out credit via private credit to technology firms and investing via their real estate asset management arms in data centers, energy firms and distribution centers which service online merchandise trade.

AI infrastructure takes an ever larger proportion of both the existing and new investments of Blackstone, KKR, Apollo, Carlyle, CVC and other leading private equity firms.

Their hopes are riding on the current fourth industrial revolution driven by artificial intelligence, AI. Blackstone, KKR, Apollo, Carlyle, CVC are investing heavily in artificial intelligence, AI because the AI driven companies, especially the magnificent 7 technology companies namely Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla have outperformed the S&P 500 in the last ten years.

All this AI investment crowding seems much like the dot com boom and subsequent bust, according to Wolfteam Ltd.'s projections and estimates. It is true that we are still not in a state of euphoria, which was the state of mind in 1999. However the artificial intelligence, AI investment crowding out by Blackstone, KKR, Apollo, Carlyle, CVC and the other leading private equity firms which together are managing more than 4 trillion USDs could slowly but steadily build up to market euphoria, which subsequently could lead to a stock market crash, which is defined as a fall in the S&P 500, Dow Jones Industrial Average and the Nasdaq Composite of more than 35 %.

Yes, Blackstone, KKR, Apollo, Carlyle, CVC and the other alternative asset managers are investing in the future, because artificial intelligence, AI will change profoundly the way the world does business, enjoys leisure and builds new things. That said, excesses, signs of which are building could lead to a stock market crash, followed by economic recession bigger than the Great Recession in 2009-2013.

However, the net benefits of AI should be positive. 

Figma IPO Valuation

 

Figma, the design systems and prototyping startup firm listed via Initial Public Offering, IPO this Thursday on the New York Stock Exchange. Figma's stock price increased by an exceptional 300 % in its first day of trading compared to the IPO price.

This is the highest first day increase of a company going public raising more than 1 billion USDs in 30 years, according to Bloomberg. This might just be a precursor of an IPO technology boom driven by artificial intelligence, AI akin or even bigger than the IPO boom and subsequent bust in 1997 - 2001 or the dot com boom and bust otherwise called.

According to Figma's -S-1 IPO filing the web design firm reported revenue of 749.01 million USD with a loss of (732) million in 2024 compared to revenue of 504.9 million USD and profit of 737.8 million driven mainly by other, non operating income items.

On a rolling basis Figma's revenue is 821 million USDs with 18 % non-GAAP operating margin.

Figma's current market capitalization is 56 billion USD. 

Figma's intrinsic valuation is 110 billion USDs according to Wolfteam Ltd.'s  projections and estimates.

Wolfteam Ltd.'s projections reflect the assumption that Figma's revenue will continue to grow by close to the last 46 % trailing year on year revenue growth and Figma will achieve substantial, around 17 % net profit margin.

All in all, Figma's giant price rise on the first Initial Public Offering, IPO day bodes great for both Figma's prospects and could signal a new era of fast, hectic technology mergers and acquisitions deals and IPO deal activity that could rival or even surpass the dot com boom and bust. All this driven by artificial intelligence, AI. 

How Big Is The AI Opportunity?

 

Some Wall Street equity research analysts estimate that artificial intelligence, AI could increase work, productivity and the economy as a whole more than the internet or the mobile phone or by about 40 trillion USDs, which is approximately 40 % of the world's GDP.

The artificial intelligence, AI opportunity is about 8.2 trillion, USDs according to Wolfteam Ltd.'s projections and estimates. Most of the mathematical models incorporated in artificial intelligence, AI have been known for decades. It is just that their creative application and the newly found great computing power increases the potential of artificial intelligence, AI or machine learning.

8.2 trillion USDs is the global annual revenue estimate from artificial intelligence, AI in Wolfteam Ltd.'s view.

This would still make the current artificial intelligence, AI hyperscalers companies Alphabet, Meta, Microsoft, Amazon, Apple, NVIDIA potentially much more valuable. 

Will There Be a 100 billion USD Private Equity Buyout

 

In the last private equity boom between 2003 - 2008, there was talk and expectations of a 100 billion USD private equity buyout.

This never materialized.

In the current private equity boom there are again prerequisites for a 100 billion USD private equity buyout.

Private equity firms manage 4.4 trillion USDs globally. Blackstone, the biggest alternative asset manager for example manages 1.1 trillion USD in alternative assets.

For a 100 billion USD private equity to happen many things have to come in place. Several private equity managers have to unite, because the individual funds they manage are not big enough, the largest private equity fund is CVC's 23 billion USD in raised capital. In addition a net cash flow positive company with good growth prospects from an established industry like energy, materials, industrials, consumer staples,  etc. has to be on offer. The particular company should also be able to tolerate high debt levels, which are the way private equity firms create leverage in private equity buyouts.

A 100 billion USD private equity buyout has around 70 % chance of happening in the current private markets boom, according to Wolfteam Ltd.'s projections and estimates.

An interesting candidate would be a large capitalization technology company. However, private equity firms are risk averse in investing in large capitalization technology companies due to the ever changing and dynamic nature of technology. There is always the chance that a new technological wave or nimble competitor could erode the business of even large capitalization, established technology companies. and since private equity alternative investment companies manage money for pension funds, university endowments, insurance companies and other institutions the prospects of a 100 billion USD technology investment loosing large part of its value relatively fast is not an appealing prospect.

The private markets boom, however is in full swing and alternative asset managers could and are making large capitalization investments. 

Private Equity Firms And Long-Term Horizon Investing

One of the main advantages of investing in private equity is the longer-term horizon offered by nonpublic investments compared to public equities investing.

Accordingly private equity returns have beaten the S&P 500 returns in the last 10 years, but lagged the S&P 500 in the last 20 years and performed worse than the Nasdaq Composite both in the last ten years with around 2 % less in the last ten years in yearly return for private equity and by wide 7 % returns less in the last 20 years per year for private equity compared to the Nasdaq Composite, measured by the Internal Rate of Return or the rate that equates to 0 the initial outlay and the final returns.

It seems that the direct management style of private equity companies of non public companies has yielded better results than the general S&P 500 sectors.

However, due to private equity propensity to acquire net cash flow positive companies from established sectors as energy, industrials, financials, materials, consumer staples etc, private equity misses out on the chance to invest in mid capitalization and large capitalization innovative technology companies, according to Wolfteam Ltd.'s view. The main reason is that technology companies are notoriously unprofitable, especially in the initial growth stages.

And the capital managed by private equity firms comes mainly from pension funds, university endowments and other institutions, which by default and by statute invest for the long-term. However, pension funds, university endowments and other institutions require mature investments in relatively safe companies, which have an economic moat, that is. Thus, they can tolerate long-term investment holdings from 5 years onward. In this way, however, private equity firms miss the chance to invest en masse in leading technology companies, because private equity companies do have technology companies in their portfolio. Private equity companies invest indirectly in technology companies by buying up energy companies, investing in data center infrastructure and online merchandise distribution centers.

Thus, private equity companies utilize their long-term investment horizon.