Private Equity Stocks Plummet Amid Software Selloff and Rising Credit Risks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 03 2026
0mins
Source: Benzinga
- Market Panic Intensifies: Private equity stocks plummeted sharply on Tuesday as a violent selloff in software shares raised concerns about potential stress in credit portfolios, leading to a downturn in investor sentiment.
- Software Industry Crisis: Software valuations have been undermined by rising competition from generative AI platforms and slowing enterprise spending, with the iShares Expanded Tech-Software Sector ETF (NYSE:IGV) dropping for the sixth consecutive session, reaching lows not seen since April 2025.
- Concentration Risk in Private Equity: The software sector has represented approximately 25% of total private equity buyout deal value in recent years, leaving some lenders exposed to companies facing earnings and valuation pressures due to this concentration.
- Changing Liquidity Environment: Macro strategist Andreas Steno Larsen warned that larger listed players in private credit, such as Apollo, are effectively high-beta liquidity proxies, suggesting that they share similar trading characteristics with Bitcoin, reflecting the expansion of the “shadow” monetary system.
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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: 124.350
Low
136.00
Averages
164.45
High
182.00
Current: 124.350
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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See More
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- Successful Transaction: Apollo-managed funds completed the sale of ALTEMIRA Holdings, marking a significant achievement in industry consolidation and transformation within Japan's industrial sector, thereby reinforcing its position in the Asian aluminum packaging market.
- Industry Consolidation Example: ALTEMIRA emerged as a successful case of sponsor-led consolidation in Japan's industrial sector by integrating Showa Denko and Mitsubishi Materials' aluminum businesses, showcasing Apollo's execution capabilities in complex carve-out transactions.
- Unique Recycling Ecosystem: ALTEMIRA operates one of the world's few vertically integrated closed-loop aluminum recycling ecosystems, covering the entire process from used beverage can collection to processing and manufacturing, enhancing its competitive edge in the market.
- Strategic Investment Partner: Apollo's investment in ALTEMIRA highlights its role as a trusted partner to Japan's leading corporations, providing differentiated solutions to help businesses achieve strategic objectives, particularly in sectors historically challenging for outside capital to penetrate.
See More
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- Successful Fundraising: Bridge Investment Group announced the successful close of its Bridge Logistics Value Fund II, raising nearly $1.4 billion in equity commitments, surpassing its $1 billion target, reflecting strong investor confidence in the logistics market.
- Investment Strategy: The fund focuses on acquiring and repositioning high-quality logistics real estate assets in supply-constrained U.S. infill and global gateway markets, creating operational value through leasing, asset management, and targeted capital improvements to capitalize on long-term demand drivers in the industrial sector.
- Market Opportunities: BLV II's investment strategy emphasizes acquiring well-located assets at attractive prices in markets with strong long-term demand fundamentals, expected to benefit from supply chain modernization and e-commerce growth, thereby enhancing its competitive position.
- Team Strength: Jay Cornforth, CEO of Bridge, stated that the successful close of BLV II reflects the strength of the team and the resilience of the logistics sector, indicating that disciplined investing in high-quality industrial real estate continues to present compelling opportunities.
See More
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- Payment Amount Raises Questions: Senator Ron Wyden is scrutinizing former Apollo Management chairman Leon Black's $170 million payments to convicted sex trafficker Jeffrey Epstein, asserting that Black's explanation fails to justify why the amounts significantly exceeded those paid to other advisors.
- Investigation Scope Expands: Wyden is also seeking to determine whether several financial institutions violated federal anti-money laundering laws by failing to adequately screen and report Black's suspicious transactions with Epstein, potentially leading to broader compliance issues.
- Testimony Requirement: The House Oversight Committee plans to depose Black under oath, focusing on why he paid Epstein $100 million without a contract and the conflicting narratives regarding the quality of Epstein's tax planning services.
- Internal Review Findings: Although Apollo's independent review found no evidence of Black's involvement in Epstein's criminal activities, his resignation as CEO and chairman in 2021 continues to raise concerns about his business ethics.
See More
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- Revenue Performance: Broadcom reported $22.19 billion in revenue for Q2 2026, slightly missing the $22.27 billion consensus forecast, with a 48% year-over-year increase, but failed to meet market expectations for higher AI revenue, resulting in a post-market stock decline.
- Profitability Gains: Adjusted earnings per share (EPS) rose 54% to $2.44, surpassing the expected $2.40, while adjusted EBITDA increased 52% to $15.24 billion, indicating strong performance in the AI semiconductor sector.
- AI Business Outlook: Broadcom anticipates AI semiconductor revenues of $56 billion for FY 2026 and a target of at least $100 billion for FY 2027, although market skepticism regarding these targets led to a muted stock response.
- Customer Order Situation: The company secured over $30 billion in AI semiconductor orders this quarter, reflecting robust market demand; however, the infrastructure software segment's revenue fell short of expectations for the second consecutive quarter, impacting overall market reaction.
See More
US Stock Indices Decline Amid Tensions and Economic Data
- Market Retreat: On Wednesday, the S&P 500 index fell by 0.74%, the Dow Jones Industrial Average dropped by 1.21%, and the Nasdaq 100 index decreased by 0.29%, indicating market vulnerability amid escalating US-Iran tensions that negatively impacted investor sentiment.
- Oil Price Surge: WTI crude oil prices rose over 2% to a 1.5-week high following the US interception of Iranian missiles and drones, heightening concerns about Middle Eastern stability and potentially affecting global supply chains and inflation expectations.
- Strong Employment Data: The US May ADP employment change increased by 122,000, surpassing expectations of 120,000, signaling signs of economic recovery that could support the stock market, although overall market performance remains influenced by other factors.
- Divergent Tech Stock Performance: While Marvell Technology rose over 3%, software and cybersecurity stocks faced significant declines, with Datadog and IBM dropping more than 6%, reflecting a lack of confidence in the tech sector despite some positive developments.
See More
Competitive Landscape of Alternative Asset Management
- Blackstone's Market Position: As the world's largest alternative asset manager, Blackstone oversees over $1.3 trillion in assets, with FY 2025 revenue reaching $14.4 billion, reflecting a 12.2% growth, showcasing its robust presence in real estate and infrastructure, while net income approached $3 billion, indicating strong profitability.
- Apollo Global Management's Growth Potential: Apollo reported FY 2025 revenue of $32.5 billion, a 22.7% increase, with net income of approximately $3.5 billion, demonstrating success in integrating retirement income solutions through its subsidiary Athene, enhancing its appeal in the long-term investment market.
- Risks and Challenges: Blackstone faces risks related to revenue volatility and dependence on third-party fundraising, while Apollo must navigate credit rating risks associated with Athene and complex global regulations, factors that could impact future growth potential for both firms.
- Valuation Comparison and Investment Recommendation: Apollo appears more affordable based on future earnings estimates, with a forward P/E of 14.2x compared to Blackstone's 19.5x, and Apollo's faster asset management growth rate makes it a suitable choice for investors seeking long-term returns.
See More
