Why Blackstone Rallied Today

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Shares of alternative investment giant Blackstone (BX) rallied 4.5% today as of 2:06 p.m. ET.

Today, Blackstone surpassed analyst predictions for its second-quarter earnings, maintaining its status as the leading authority in the alternative investment sector – the world’s largest private equity firm. Additionally, an emerging possibility of sourcing capital from retirement funds has further fueled enthusiasm among investors.

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Blackstone continues to roll on

During the second quarter, Blackstone’s earnings increased by 33%, reaching $3.71 billion in revenue. At the same time, their earnings per share (EPS) surged by an impressive 69%, resulting in a EPS of $0.98. This figure surpassed the predictions.

Indeed, the markets bounced back significantly during the second quarter, leading to increased earnings and an improvement in performance-related income. Simultaneously, Blackstone saw a substantial increase in assets they manage, accumulating a massive $52.1 billion, which is roughly on par with their inflows from the previous three quarters.

The total Assets Under Management (AUM) reached an astounding $1,210 billion that’s a “T” for trillion marking a 12.4% increase compared to the same time last year. Interestingly, approximately 15% of this AUM remains in reserve, often referred to as ‘dry powder.’ This part isn’t generating fees yet but can be strategically used when beneficial opportunities arise.

President Trump wants to open 401(k) accounts to PE

Blackstone’s shares surged beyond the previous uptrend, fueled by speculations that the Trump administration might release an executive order permitting private equity investments in retirement plans like 401(k)s and others.

Such an outcome might greatly benefit private equity companies, including Blackstone. However, these prominent players in private equity need to exercise caution when seizing the opportunity.

On the conference call with analysts, current CEO Jonathan Gray said:

Let’s all show some understanding as we navigate through this. Previously discussed, this situation presents a strong opportunity for individual investors within defined contribution plans. The allure lies in the access to alternative investments, offering both attractive returns and diversification benefits. Given these points, it seems likely that this shift will occur eventually. It’s more suitable for those at an earlier stage of life compared to those nearing retirement.

In the initial stages, target date funds are expected to lead the way. The market is vast, but our unique selling point lies in our established scale perpetual products with robust track records that can handle substantial investments – a significant competitive edge.

It seems that Blackstone’s systems are ready for takeoff, given its strong recent investment returns and expectations of continuous capital inflows and new funding sources. However, the stock is already quite expensive, trading at approximately 36.7 times this year’s earnings estimates. Consequently, it may be wise to hold onto existing shares for now, but potential buyers might want to wait for another market downturn before investing.

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2025-07-24 23:12