Blue Owl Capital Sees No Red Flags in AI Software Disruption
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 05 2026
0mins
Should l Buy OWL?
Source: Benzinga
- Strong Software Loan Performance: Co-CEO Marc Lipschultz stated that Blue Owl's software loan book remains robust without any performance declines, with loans averaging 30% of enterprise value and possessing 'huge' equity cushions, indicating the firm's resilience in the tech sector.
- Asset Management Growth: Blue Owl's assets under management (AUM) increased by 22% to $307 billion as of December 31, 2024, primarily driven by new capital commitments and the acquisition of IPI, showcasing the company's strong market appeal.
- Significant Capital Commitments: The firm raised $17 billion in new capital commitments in the recent quarter, totaling $56 billion for the year, reflecting Blue Owl's success in attracting investors and enhancing its financial position.
- Challenges in Private Credit: Despite strong growth, CFO Alan Kirshenbaum noted that the firm is behind its Investor Day goals due to headwinds in private credit, indicating the complexities of the current market environment.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy OWL?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on OWL
Wall Street analysts forecast OWL stock price to rise
15 Analyst Rating
12 Buy
3 Hold
0 Sell
Strong Buy
Current: 12.490
Low
18.00
Averages
21.13
High
28.00
Current: 12.490
Low
18.00
Averages
21.13
High
28.00
About OWL
Blue Owl Capital Inc. is an alternative asset management company. The Company deploys private capital across Credit, GP Strategic Capital and Real Estate platforms on behalf of institutional and private wealth clients. Its product platforms include Credit, GP Strategic Capital and Real Estate. Its credit products offer private financing solutions primarily to upper-middle-market companies. Its credit products are offered through a mix of business development companies, long-dated private funds, managed accounts and collateralized loan obligations. It is focused on acquiring equity stakes in or providing debt financing to private capital firms. Its Real Estate products are focused on acquiring triple net lease real estate occupied by investment-grade or creditworthy tenants. Its Real Estate products are offered through Permanent Capital vehicles, including its real estate investment trusts, and long-dated private funds. It offers asset management services to the insurance industry.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
AI Trade Sentiment Reverses, Four Major Industries Hit Hard
- Software Sector Hit: The iShares Tech-Expanded Software Sector ETF (NYSE:IGV) has plummeted nearly 20% year-to-date, making it the worst-performing industry, as fears mount that AI tools could disintermediate traditional software providers, causing forward P/E ratios for application software to drop from 35.3 to 23.7 and systems software from 35.5 to 23.3, reflecting market concerns over future earnings durability.
- Brokerage Pressure: Investment banks and brokerage firms are under pressure following the rollout of AI tools by fintech firm Altruist, with forward P/E ratios declining from 24.7 to 15.9, as the market fears that AI could replace traditional advisors in the future, leading to long-term margin compression.
- Insurance Broker Anxiety: Insurance brokers are facing disruption due to the integration of AI-driven tools, with the S&P Insurance Brokers industry index down 4% year-to-date; while the insurance sector remains relationship-driven, there are concerns that AI could erode commissions, impacting brokers' income stability.
- Asset Management Damage: Alternative asset managers are indirectly affected by significant exposure to private software companies, with many large firms down double digits year-to-date, as declining public software valuations raise concerns about their private portfolios, shrinking exit opportunities.
See More
Five Point Forms Residential Land Banking Partnership with Blue Owl
- Strategic Partnership: Five Point has formed a new residential land banking investment partnership with Blue Owl Capital through its Hearthstone platform, aimed at acquiring residential homesites in high-quality U.S. housing markets, leveraging Hearthstone's operational expertise and long-standing relationships with national homebuilders to enhance market competitiveness.
- Business Expansion Milestone: This collaboration marks an important first step for Hearthstone in scaling its land banking business, expected to provide broader growth opportunities and further solidify its position as a leading residential land banking platform.
- Equity Dilution Risk Control: Five Point has agreed to issue warrants to funds managed by Blue Owl that will only vest upon achieving specific capital contribution thresholds, ensuring that existing shareholders' equity will not be immediately diluted, with potential dilution occurring only if the warrants are exercised.
- Optimistic Market Outlook: Five Point's acquisition of the Hearthstone platform in 2025 aims to expand its asset-light, fee-generating business model, with expectations that this partnership will bring long-term growth opportunities, particularly in the rapidly developing residential market.
See More
Evercore ISI Sees Opportunities in Undervalued Stocks
- Market Volatility Analysis: Evercore ISI highlights that recent pullbacks in momentum stocks have severely impacted several equities, particularly in software and precious metals, reflecting market concerns over the effects of artificial intelligence.
- Investment Opportunity Identification: Evercore has compiled a list of stocks termed 'Falling Knives,' which have dropped over 30% in the past year and currently have short interest in the 65th percentile or higher, indicating potential for rebound.
- Software Stocks Hit Hard: Companies like ServiceNow, Salesforce, and Workday have been significantly affected due to fears that AI could undermine their business, yet Evercore notes these stocks are still viewed as worthy investments among clients.
- Optimistic Market Outlook: Evercore maintains a bullish stance on U.S. equities, projecting that with no recession in sight and the Fed likely to cut rates, the SPX is on track for a year-end target of 7,750 points, indicating strong market potential.
See More
11 Stocks That Have Plummeted and Appear to Be Good Investment Opportunities
- Market Opportunities: There are potential buying opportunities in the stock market due to recent significant declines in stock prices.
- Investment Strategy: Investors may find value in stocks that have been overlooked or undervalued amidst the market downturn.
See More
Salesforce Shares and 10 Other Stocks That Have Plummeted and Appear to Be Good Investments
Market Opportunities: There are potential buying opportunities in the stock market due to recent significant declines in stock prices.
Investment Strategy: Investors may find value in stocks that have been overlooked or undervalued following market crashes.
See More
Private Credit Markets Face AI Disruption Risks
- Increased Pressure on Software Sector: The introduction of new AI tools by Anthropic has triggered a sell-off in software data provider shares, intensifying uncertainty in the private credit market, particularly regarding lending risks to software companies.
- Decline in Asset Management Stocks: Ares Management fell over 12%, Blue Owl Capital dropped more than 8%, and KKR and TPG saw declines of nearly 10% and 7%, respectively, reflecting investor concerns about AI's potential impact on cash flows and default risks.
- Rising Default Risks: UBS Group has warned that in an aggressive disruption scenario, default rates in U.S. private credit could rise to 13%, significantly higher than the projected stress for leveraged loans and high-yield bonds, estimated at 8% and 4%, respectively.
- Liquidity Issues Intensified: Although strains in private credit predate AI concerns, Jeffrey C. Hooke noted that existing liquidity and loan extension issues have been exacerbated by recent developments, adding new challenges to an already pressured sector.
See More
AI Trade Sentiment Reverses, Four Major Industries Hit Hard
- Software Sector Hit: The iShares Tech-Expanded Software Sector ETF (NYSE:IGV) has plummeted nearly 20% year-to-date, making it the worst-performing industry, as fears mount that AI tools could disintermediate traditional software providers, causing forward P/E ratios for application software to drop from 35.3 to 23.7 and systems software from 35.5 to 23.3, reflecting market concerns over future earnings durability.
- Brokerage Pressure: Investment banks and brokerage firms are under pressure following the rollout of AI tools by fintech firm Altruist, with forward P/E ratios declining from 24.7 to 15.9, as the market fears that AI could replace traditional advisors in the future, leading to long-term margin compression.
- Insurance Broker Anxiety: Insurance brokers are facing disruption due to the integration of AI-driven tools, with the S&P Insurance Brokers industry index down 4% year-to-date; while the insurance sector remains relationship-driven, there are concerns that AI could erode commissions, impacting brokers' income stability.
- Asset Management Damage: Alternative asset managers are indirectly affected by significant exposure to private software companies, with many large firms down double digits year-to-date, as declining public software valuations raise concerns about their private portfolios, shrinking exit opportunities.
See More
Five Point Forms Residential Land Banking Partnership with Blue Owl
- Strategic Partnership: Five Point has formed a new residential land banking investment partnership with Blue Owl Capital through its Hearthstone platform, aimed at acquiring residential homesites in high-quality U.S. housing markets, leveraging Hearthstone's operational expertise and long-standing relationships with national homebuilders to enhance market competitiveness.
- Business Expansion Milestone: This collaboration marks an important first step for Hearthstone in scaling its land banking business, expected to provide broader growth opportunities and further solidify its position as a leading residential land banking platform.
- Equity Dilution Risk Control: Five Point has agreed to issue warrants to funds managed by Blue Owl that will only vest upon achieving specific capital contribution thresholds, ensuring that existing shareholders' equity will not be immediately diluted, with potential dilution occurring only if the warrants are exercised.
- Optimistic Market Outlook: Five Point's acquisition of the Hearthstone platform in 2025 aims to expand its asset-light, fee-generating business model, with expectations that this partnership will bring long-term growth opportunities, particularly in the rapidly developing residential market.
See More
Evercore ISI Sees Opportunities in Undervalued Stocks
- Market Volatility Analysis: Evercore ISI highlights that recent pullbacks in momentum stocks have severely impacted several equities, particularly in software and precious metals, reflecting market concerns over the effects of artificial intelligence.
- Investment Opportunity Identification: Evercore has compiled a list of stocks termed 'Falling Knives,' which have dropped over 30% in the past year and currently have short interest in the 65th percentile or higher, indicating potential for rebound.
- Software Stocks Hit Hard: Companies like ServiceNow, Salesforce, and Workday have been significantly affected due to fears that AI could undermine their business, yet Evercore notes these stocks are still viewed as worthy investments among clients.
- Optimistic Market Outlook: Evercore maintains a bullish stance on U.S. equities, projecting that with no recession in sight and the Fed likely to cut rates, the SPX is on track for a year-end target of 7,750 points, indicating strong market potential.
See More
11 Stocks That Have Plummeted and Appear to Be Good Investment Opportunities
- Market Opportunities: There are potential buying opportunities in the stock market due to recent significant declines in stock prices.
- Investment Strategy: Investors may find value in stocks that have been overlooked or undervalued amidst the market downturn.
See More
Salesforce Shares and 10 Other Stocks That Have Plummeted and Appear to Be Good Investments
Market Opportunities: There are potential buying opportunities in the stock market due to recent significant declines in stock prices.
Investment Strategy: Investors may find value in stocks that have been overlooked or undervalued following market crashes.
See More
Private Credit Markets Face AI Disruption Risks
- Increased Pressure on Software Sector: The introduction of new AI tools by Anthropic has triggered a sell-off in software data provider shares, intensifying uncertainty in the private credit market, particularly regarding lending risks to software companies.
- Decline in Asset Management Stocks: Ares Management fell over 12%, Blue Owl Capital dropped more than 8%, and KKR and TPG saw declines of nearly 10% and 7%, respectively, reflecting investor concerns about AI's potential impact on cash flows and default risks.
- Rising Default Risks: UBS Group has warned that in an aggressive disruption scenario, default rates in U.S. private credit could rise to 13%, significantly higher than the projected stress for leveraged loans and high-yield bonds, estimated at 8% and 4%, respectively.
- Liquidity Issues Intensified: Although strains in private credit predate AI concerns, Jeffrey C. Hooke noted that existing liquidity and loan extension issues have been exacerbated by recent developments, adding new challenges to an already pressured sector.
See More
