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.

 

Private Equity Firms And Long-Term Capital

 

Most of Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. and other leading private equity firms or alternative asset management firms have invested in life insurance companies, pension companies and other annuities businesses.

The main goal is to access long-term capital via the annuity payments insurance and pension insurance companies receive as part of their regular business.  Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. and other alternative asset management firms call this kind of long-term capital perpetual capital. And perpetual capital constitutes between 30 % to 40 % of Blackstone, KKR, Apollo and Carlyle's total assets under management according to the analysis of Blackstone, KKR, Apollo and Carlyle's financial statements by Wolfteam Ltd.

Via the long-term perpetual capital Blackstone, KKR, Apollo and Carlyle and other alternative asset managers are not constrained so much by funds' maturities and they can invest the perpetual capital for the long-term - above 7 years. In this way Blackstone, KKR, Apollo and Carlyle have more time for operational improvements and the private equity buyouts and also the real estate assets and private credit lending and thus they can achieve even higher S&P 500 beating returns and thus maximize their value.

Due to large part of the high share of perpetual long-term capital in Blackstone, KKR, Apollo and Carlyle's assets under management Blackstone, KKR, Apollo and Carlyle are all undervalued. Blackstone, KKR, Apollo and Carlyle's intrinsic value is 3 times higher on average, according to Wolfteam Ltd.'s projections and estimates. Thus if managed right Blackstone, KKR, Apollo and Carlyle can increase their market capitalization by more than threefold and unlock hundreds of billions of USD of value for their shareholders, employees and other stakeholders.

Artificial Intelligence, AI And Private Equity Firms

 

Blackstone, KKR, Apollo, Carlyle, Ares, CVC and other leading private equity, real estate and private credit or alternative asset managements' firms main investment theme is artificial intelligence, AI, according to public data and Wolfteam Ltd.'s estimates.

Via private equity buyouts the leading alternative asset managers buy out, invest in mid sized and smaller technology firms active in artificial intelligence, AI, which they reform and sell down the road in 7-10 years to achieve usually S&P 500 market beating returns. Via their real estate business leading alternative asset managers invest in artificial intelligence, AI data centers and also online merchandise distribution centers, which utilize heavily artificial intelligence, AI. Via their private credit investment management business the alternative asset managers give out credits with lending rates from 7 % to 14 %, where traditional money center banks and regional lenders do not thread due to either regulatory rules or risky business perspectives.

Artificial intelligence, AI is the fourth industrial revolution we are living currently. Alphabet, Microsoft, Meta, Amazon, Apple, Tesla and NVIDIA or the largest artificial intelligence, AI hyperscaler companies are undervalued and by extension artificial intelligence, AI is undervalued, according to Wolfteam Ltd.'s projections and estimates. Artificial intelligence, AI still remains to transcend, penetrate more deeply many sectors of the economy and unlock tens of trillions of USDs of addition value in the next 10 years.

By extension the leading private equity firms Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. and many mid sized and smaller alternative asset managers are undervalued, in Wolfteam Ltd.'s view.

NVIDIA's Market Capitalization Could Reach 10 trillion USD By End 2027

NVIDIA, the computer chips and Graphical Processing Units, GPUs producer is sill undervalued, according to Wolfteam Ltd.'s projections and estimates. NVIDIA's intrinsic value is 10 trillion USDs, according to Wolfteam Ltd.'s projections and estimates. That value can be realized by end 2025.

The fourth industrial revolution or the artificial intelligence, AI is in full motion, even in its beginning stage and NVIDIA is the poster company of the AI revolution.

AI will penetrate every sector of the economy and the demand for NVIDIA's GPU chips will only grow from here.

A risk to the above Wolfteam  Ltd.'s NVIDIA valuation is the emergence of technologically superior competitor that produces more powerful GPU computer chips that power personal computers and data centers. In the short-term this risk is not large.

So NVIDIA remains undervalued. 

 

Apollo Buys Pension Insurance Corporation For 7.78 Billion USD. An Analysis

Athora, backed by the alternative asset manager Apollo Global Management agreed to buy the defined benefit pension schemes UK provider Pension Insurance Corporation.

https://www.reuters.com/markets/europe/luxembourgs-reinet-advanced-talks-sale-uk-insurer-stake-athora-2025-07-03/ 

PIC had a portfolio worth nearly 60 billion pounds as of December, with over 390,000 policyholders. Upon deal close, it will constitute 45% of Athora's total AuM.

Athora has 54 billion USDs of assets owned by Apollo Global Management.

With the deal Apollo aims to increase its insurance assets which constitute long-term capital. Apollo's total long-term or so called perpetual capital currently stands at 470 billion USDs from the total 785 billion USDs of assets Apollo manages.

The Pension Insurance Corporation deal will add nearly 60 billion GBPs of new long-term asset under management for Apollo.

Long-term assets can be invested for longer periods and thus allowing for alternative asset managers to compound investments for longer and achieve higher returns on invested capital.

The Pension Insurance Corporation deals is accretive by 15 % increase for Apollo Global Management's earnings per share, according to Wolfteam Ltd.'s projections and estimates.

Apollo Global Management's intrinsic value is 250 billion USDs, according to Wolfteam Ltd.'s projections and estimates. 

Most Magnificent 7 AI Stocks Could Be Valued Using Dividend Discount Model

 

Apple, Alphabet, Microsoft, Meta, NVIDIA from the Magnificent 7 distribute regulat dividends, while their dividend yield being relatively low from 0.7 % downward.

The rest 2 of the Magnificent 7, namely Tesla and Amazon have never distributed dividends.

Technology stocks, also the hyperscalers  Apple, Alphabet, Microsoft, Meta have been notoriously difficult to value because they were either unprofitable for long periods of time as public companies or do not distribute dividends. So some sort of multiples methods valuation was used by Wall Street research analysts to value Apple, Alphabet, Microsoft, Meta, NVIDIA, Tesla and NVIDIA, the Magnificent 7.

But now as Apple, Alphabet, Microsoft, Meta, NVIDIA distribute regular dividends, the dividend discount model could be utilized by Wall Street equity research analysts.

The Dividend Discount Model gives an unique view on the company be it being heavily reliant on the equity analysts' assumptions.

But Dividend Discount Model gives a good basis to value Apple, Alphabet, Microsoft, Meta, NVIDIA, according to Wolfteam Ltd.'s projections and estimates.

 

Private Equity Firms Are Leveraged On AI

 

Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc., most of the leading alternative asset managers active predominantly in private equity, but also in real estate, private credit and secondaries are leveraged on artificial intelligence, AI and technology in general.

Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. have done numerous private equity leveraged buyouts whereby they have purchased mid market technology firms by putting only the equity needed which is normally 30-40 % of the deal size and borrowing the rest on debt markets via high yield bonds and debt. In this way Blackstone, KKR, Apollo, Carlyle, Ares, CVC, etc. become leveraged, on loan that is investors in artificial intelligence related companies, namely by investing in beside technology companies also in AI data centers, infrastructure and the energy that powers artificial intelligence, AI.

In addition by giving out credits with 7 % to 14 % interest to technology companies as part of their private credit businesses on very little underpinning equity, Blackstone, KKR, Apollo, Carlyle, Ares, CVC additionally add to their leverage to artificial intelligence, AI and the technology sector in general.  

In this way Blackstone, KKR, Apollo, Carlyle, Ares, CVC and other global leading private equity companies should exhibit returns that magnify both the wins and losses of both mid market technology companies and the largest hyperscalers like Alphabet, Microsoft, Meta, Amazon.

As we are living in the fourth industrial revolution, namely powered by AI, Blackstone, KKR, Apollo, Carlyle, Ares, CVC are undervalued on AI, according to Wolfteam Ltd.'s projections and estimates. 

Quantum Computing Stocks Could Lift Off

 

Quantum computing stocks like Quantum Computing Inc, D-Wave Quantum Inc and Rigetti Computing Inc, etc. could rise substantially.

On one hand the stock market is going higher driven by the artificial intelligence, AI trade and quantum computing is adjacent investment thesis to artificial intelligence.

On the other hand, The Defense Advanced Research Projects Agency has commissioned a study for quantum computing commercial viability. Which in one sense means the US government is throwing its weight behind quantum computing.

In addition, artificial intelligence, AI commands more and more computing resources. Quantum computing is one way for these resources to be created and multiplied.

In short, quantum computing stocks' market capitalization could rise multiple fold, according to Wolfteam Ltd.'s projections and estimates. 

With Its Leveraged Investments In AI, Blackstone Is Set To Outperform The General Stock Market

 

Blackstone Inc, the global leader in alternative asset management has invested heavily in AI by investing in data centers, infrastructure for data centers, infrastructure for cloud computing, online merchandising and energy producing assets.

Via its investments in private equity Blackstone has invested in a leveraged way in artificial intelligence, AI by investing in the equity portion of private equity buyout deals and borrowing in debt markets the rest needed to fund the private equity buyout deals. Thus via the leveraged nature of its investments in private equity buyouts of mid market technology companies and technology infrastructure, Blackstone's investments are leveraged on the performance of artificial intelligence, AI stocks.

In short, Blackstone is set to outperform the general stock market, as long as the AI trade continues to boom, according to Wolfteam Ltd.'s projections and estimates. 

Private Equity Companies Are Lagging The Market And Are Undervalued

 

The world's biggest private equity, real estate and private credit investment management firms Blackstone, KKR, Apollo, Carlyle, Ares, CVC etc. are lagging the global stock markets recovery. Furthermore, Blackstone, KKR, Apollo, Carlyle, Ares, CVC are undervalued according to Wolfteam Ltd.'s projections and estimates.

Most of Blackstone, KKR, Apollo, Carlyle, Ares, CVC's private equity, private credit and real estate investments are tied to mid market and smaller technology companies active in artificial intelligence, AI. Large part of Blackstone, KKR, Apollo, Carlyle, Ares, CVC's investment flows go indirectly toward the Magnificent 7 AI technology companies, namely Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla via investments in technology data centers and other AI infrastructure.

While  Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla's stocks prices outside Tesla have recovered, the stock market capitalization of Blackstone, KKR, Apollo, Carlyle, Ares, CVC remain around 25 % below their recent peaks.

The artificial intelligence, AI trade is in full swing and it makes no sense for Blackstone, KKR, Apollo, Carlyle, Ares, CVC, which have invested heavily in artificial intelligence, AI to be left behind in terms of stock market capitalization recovery, in Wolfteam Ltd.'s view.

If anything, due to the leveraged private equity buyout nature of their investments Blackstone, KKR, Apollo, Carlyle, Ares, CVC should recover even quicker than the  Magnificent 7 AI technology companies, namely Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla or the general stock market.