Goldman Sachs’ Stocks With Highest Consensus Returns: 42 Stocks With The Highest Consensus ROE

19. Blackstone Inc. (NYSE:BX)

Consensus ROE: 19%

Number of Hedge Fund Investors in Q2 2024: 58

Blackstone Inc. (NYSE:BX) is one of the biggest asset management companies in the world. It provides a wide variety of products and services such as debt investment, buyouts, and minority investments. As of June 2024, Blackstone Inc. (NYSE:BX) had $40 billion in total assets, making it one of the biggest firms of its kind. Looking at the shares, its stock is up by just 16% year to date since private markets and debt activity remain muted as long as interest rates are high. This is also reflected in Blackstone Inc. (NYSE:BX)’s financials, as the firm expects that its third quarter realizations will be $300 million which is a historically low figure. However, pent up demand for private equity and capital markets activity could help Blackstone Inc. (NYSE:BX) moving forward. Its forward P/E ratio is currently 25, which is higher than the peer value of 20, which implies that perhaps some of this optimism is already factored into the shares.

Blackstone Inc. (NYSE:BX)’s management shared its plans to become the global leader in AI investments during the Q2 2024 earnings call:

“Current expectations are that there will be approximately $1 trillion of capital expenditures in the United States over the next five years to build and facilitate new data centers, with another $1 trillion of capital expenditures outside the United States. The need to provide power for these data centers is a major contributor to an expected 40% increase in electricity demand in the United States over the next decade compared to minimal growth in the last decade. We believe these explosive trends will lead to unprecedented investment opportunities for our firm. Blackstone is positioning itself to be the largest financial investor in AI infrastructure in the world as a result of our platform, capital and expertise. Our portfolio today consists of $55 billion of data centers, including facilities under construction, along with over $70 billion in prospective pipeline development.

Our largest data center portfolio company, QTS, has grown lease capacity 7x since we took it private in 2021. Through QTS and our other holdings, we have a robust ongoing dialogue with the world’s largest data center customers. We’re also providing equity and debt capital to other AI-related companies. For example, in the second quarter, we committed to provide AI-focused cloud service provider, CoreWeave, with $4.5 billion of a $7.5 billion financing package, the largest debt financing in our history, and we’re now focusing on addressing the sector’s power needs in many differentiated ways. With large-scale platforms in infrastructure, real-estate, private credit and renewable energy, we are extremely well positioned to be the partner of choice in this rapidly growing area.”