The Power of Compounding If you threw $1,000 into Blackstone a decade ago, you’d be sitting on roughly $5,427 right now, assuming a recent trading price around $133.69. That is the quiet, compounding power of long-term investing. Over the last ten years, the alternative asset manager has consistently flexed its financial muscle. It beat the broader market by 4.37% on an annualized basis, delivering an average annual return of 18.42% and building a massive $109.32 billion market capitalization. But past performance only tells half the story, and the firm’s current landscape is shifting dramatically.

Stellar Earnings Clouded by Market Jitters Despite its impressive historical track record, Blackstone hasn’t been immune to recent turbulence. The stock actually slid about 24% over the past year as macroeconomic headwinds picked up. Even after posting a blockbuster fourth-quarter earnings report, shares barely budged. Wall Street was looking for $3.69 billion in revenue and $1.54 in adjusted earnings per share. Blackstone blew past those estimates, raking in $3.94 billion and $1.75 per share, respectively. Yet, the stock slipped a fraction of a percent to close at $121.27 on the day of the release.

Defending the Credit Portfolio Investors are clearly spooked. Widespread anxiety over commercial real estate and private credit is keeping a lid on the stock. Specifically, the market is zeroing in on the software loans tucked inside private credit portfolios, sparking fears of a looming wave of defaults. Management, however, isn’t breaking a sweat. Speaking at the Bank of America Financial Services Conference, CFO Michael Chae vigorously defended the company’s software exposure. He pointed out that their average loan-to-value ratio at origination sat below 40%. This essentially means the original purchase price of the underlying assets would have to crater by more than 60% before Blackstone’s position takes any real hit.

Playing Offense in the AI Boom While Wall Street wrings its hands over isolated credit risks, Blackstone is aggressively playing offense. The firm is sitting on a massive war chest and plans to deploy a staggering $138 billion by 2025. A huge chunk of that capital is earmarked directly for the AI infrastructure ecosystem. Management clearly sees the writing on the wall: the world will need an estimated $7 trillion in data center investments over the next five years to support the artificial intelligence boom, and Blackstone is positioning itself on the front lines of that buildout.

Overlooked Upside Potential Some models suggest the market is completely missing the forest for the trees. According to TIKR valuation data, investors are too hyper-focused on individual risks, completely ignoring Blackstone’s sheer scale and diversified growth engines. This oversight points to a massive potential mispricing. With a projected price target of $197.54, the stock could offer a lucrative 62.9% upside from its current levels. Whether you look at its ten-year compounding history or its aggressive pivot toward AI infrastructure, the firm appears to be heavily loading the deck for its next era of growth.