Apollo Leads $3.5 Billion Financing for AI Data Center Acquisition
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 27 2025
0mins
Should l Buy APO?
Source: Reuters
Apollo Global Management's stock fell 3.03% and hit a 20-day low amid a broader market decline, with the Nasdaq-100 and S&P 500 both down 1.44%.
The decline in Apollo's stock comes despite the company leading a significant $3.5 billion financing package to support Valor Compute Infrastructure's $5.4 billion acquisition of data center infrastructure. This strategic move highlights Apollo's commitment to investing in AI infrastructure and collaborating with key industry players like Nvidia Corp, which is also involved in the deal. The financing aims to address the growing demand for data center capacity, which is projected to require trillions of dollars in investment over the next decade.
This financing initiative positions Apollo favorably in the rapidly evolving AI sector, potentially enhancing its market presence and investment portfolio. However, the current market conditions may pose challenges for the stock in the short term.
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Analyst Views on APO
Wall Street analysts forecast APO stock price to rise
11 Analyst Rating
10 Buy
1 Hold
0 Sell
Strong Buy
Current: 125.150
Low
136.00
Averages
164.45
High
182.00
Current: 125.150
Low
136.00
Averages
164.45
High
182.00
About APO
Apollo Global Management, Inc. is a global alternative asset manager and a retirement services provider. It operates through three segments: Asset Management, Retirement Services and Principal Investing. The Asset Management segment focuses on three investing strategies: yield, hybrid, and equity. These strategies reflect the range of investment capabilities across its platform based on relative risk and return. The Retirement Services business is conducted by Athene Holding Ltd (Athene), a financial services company that specializes in issuing, reinsuring, and acquiring retirement savings products designed for the increasing number of individuals and institutions seeking to fund retirement needs. Athene product lines include annuities and funding agreements. The Principal Investing segment includes realized performance fee income, realized investment income from its balance sheet investments, and certain allocable expenses related to corporate functions supporting the entire company.
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.
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- Investigation Background: Apollo Global Management initiated an independent investigation in 2020 to clarify any relationships with Jeffrey Epstein, and despite extensive media coverage, the company asserts that no new evidence has emerged from the findings.
- Executive Relationship Clarification: CEO Marc Rowan and other executives at Apollo have no business or personal ties to Epstein, with the exception of former CEO Leon Black, ensuring transparency in corporate governance and leadership integrity.
- Commitment to Transparency: Apollo emphasizes that transparency and accessibility are core values, and despite external pressures, the firm remains dedicated to providing clear information to investors, thereby maintaining investor confidence.
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- Investigation Background: Apollo Global Management initiated an independent investigation in 2020 to clarify any relationships with Jeffrey Epstein, and despite extensive media coverage, the company asserts that no new evidence has emerged from the findings.
- Executive Relationship Clarification: CEO Marc Rowan and other executives at Apollo have no business or personal ties to Epstein, with the exception of former CEO Leon Black, ensuring transparency in corporate governance and leadership integrity.
- Commitment to Transparency: Apollo emphasizes that transparency and accessibility are core values, and despite external pressures, the firm remains dedicated to providing clear information to investors, thereby maintaining investor confidence.
- Market Response Strategy: Amid market volatility, Apollo Global Management states it is well-prepared and focused on delivering returns for investors, showcasing its adaptability and strategic decision-making capabilities in uncertain environments.
See More
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- Asset Management Strength: Brookfield Corporation owns 73% of Brookfield Asset Management and also directly holds Brookfield Property Group and Brookfield Wealth Solutions, creating a diversified asset management structure that enhances its market competitiveness.
- Significant Valuation Discount: With a total value of publicly traded investments at $16.1 billion and BAM stake valued at approximately $62 billion, Brookfield's combined asset value of $78.1 billion indicates an intrinsic value of $34.86 per share, significantly higher than its current price of $48, highlighting a market undervaluation.
- Future Value Expectations: Management anticipates that by 2030, Brookfield's intrinsic value could reach $140 per share based on a forecasted 25% growth in distributable earnings, potentially offering annualized returns of 15%-20%, consistent with its historical performance.
- Market Opportunity Capture: Brookfield is actively engaging in opportunities related to AI infrastructure development and new regulatory policies allowing retirement vehicles like 401(k)s to invest directly in alternative assets, demonstrating its strategic positioning and growth potential in future markets.
See More
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- Stock Performance: QXO shares gained 4.4% to close at $27.07 on Friday, reflecting a positive market reaction to the acquisition news, which may further boost investor confidence and company valuation.
- Earnings Highlights: Apollo Global Management reported better-than-expected fourth-quarter results on February 9, showcasing strong financial performance that could attract more investor interest in its future growth potential.
- Market Dynamics: On the same trading day, Thermo Fisher Scientific shares fell 1% to close at $504.82, while the iShares US Consumer Discretionary ETF gained 0.4%, indicating varied market reactions across different sectors, prompting investors to monitor industry trends.
See More
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- Philip Morris's Successful Transformation: Goldman highlights that Philip Morris is transforming into a faster-growing and more profitable business, with shares up nearly 18% year-to-date, indicating significant upside potential as it delivers strong earnings growth.
- S&P Global's Strong Positioning: Although S&P Global's stock has declined 22% this year, analysts believe its strong AI positioning and durable long-term earnings power will drive organic revenue growth, with a revised price target lowered from $555 to $498.
- Nvidia's Market Focus: Goldman expects Nvidia to report strong results in its upcoming earnings, with investors keenly watching for insights into 2027 visibility and competitive dynamics, despite high expectations for outperformance.
See More
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- Rising Default Risks: UBS analysts project that corporate loan defaults could reach between $75 billion and $120 billion over the next year, particularly impacting software and data services firms owned by private equity, thereby exacerbating instability in the credit markets.
- Delayed Market Reaction: Analysts note that the market has been slow to respond to the rapid advancements in AI technology, with many investors failing to timely recalibrate their views on credit evaluations, leading to an underestimation of credit risks that could trigger broader credit tightening.
- Potential Credit Crisis: In a worst-case scenario, default rates could double the baseline estimates, resulting in a sharp decline in liquidity in the credit markets, creating what is known as a 'tail risk' that could severely impact many companies.
- Industry Classification Impact: Mish categorizes companies into three groups, indicating that creators of foundational large language models like Anthropic and OpenAI are likely to emerge as winners, while high-debt private equity-owned software firms face greater survival pressures and may be eliminated in the AI transformation.
See More
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- Investigation Launched: Pomerantz LLP is investigating on behalf of Apollo Global Management investors regarding potential securities fraud or other unlawful business practices, highlighting serious concerns about corporate governance and compliance.
- Executive Discussions Exposed: The Financial Times reported that Apollo executives, including CEO Marc Rowan, held extensive discussions about tax arrangements with Jeffrey Epstein during the 2010s, despite the firm previously claiming no business dealings with him, which could significantly damage the company's reputation.
- Stock Price Decline: Following this news, Apollo's stock price fell by $7.69, or 5.72%, closing at $126.85 per share on February 3, 2026, reflecting market concerns over the company's governance issues.
- Potential Legal Consequences: As a prominent securities class action firm, Pomerantz LLP's investigation may lead to substantial damages and legal liabilities for Apollo, further impacting investor confidence and the company's future market performance.
See More
