Apollo Eyes $1 Trillion AI Infrastructure Financing Opportunity Across Power And Semiconductors

Apollo Global Management Inc. (NYSE:APO) shares were trading lower on Tuesday after the company reported weaker-than-expected third-quarter earnings results.

Adjusted EPS of $2.07 missed the analyst estimate of $2.20, while revenue of $4.739 billion fell short of the $5.806 billion consensus.

The company reported a $1.06 billion GAAP net loss, primarily due to unrealized mark-to-market losses in Retirement Services.

Earnings Snapshot

Third-quarter inflows reached $53 billion, while total assets under management, or AUM, rose 18% year over year to $1.074 trillion, including $880 billion in fee-generating AUM.

Fee-related revenue or increased 19.7% year over year to $1.374 billion, while fee-related earnings, or FRE, rose 23% to a record $802 million, or $1.28 per share.

Spread-related earnings, or SRE), excluding notable items, reached a record $909 million, or $1.46 per share, compared with $871 million a year earlier.

Management fees increased 18% year over year, while fee-generating AUM grew 28%.

Capital Solutions fees reached a record $290 million, marking the sixth consecutive quarter above $200 million, across more than 115 transactions split approximately 60% between credit and 40% equity.

Apollo generated record quarterly originations of $114 billion, supported by a $53 billion pipeline comprising $35 billion in asset management and $19 billion at Athene.

Investment-grade deals offered 285 basis points over Treasuries, or approximately 200 basis points above comparable corporate indexes. Sub-investment-grade deals offered 430 basis points over Treasuries, or approximately 160 basis points above comparable indexes.

Athene generated $909 million in SRE, excluding notable items, while net invested assets rose 13% year over year to $322 billion.

Major Financing Deals And AI Opportunities

Apollo highlighted major financing transactions, including $1.5 billion for Keppel, C$2.7 billion ($1.95 billion) for Enbridge (NYSE:ENB), $9 billion for ONEOK (NYSE:OKE) and $40 billion in GPU financing for SpaceX (NASDAQ:SPCX).

Its High Grade Capital Solutions business has originated more than $150 billion across 200 transactions.

The company sees AI infrastructure, particularly power and semiconductors, as a major financing opportunity, estimating the sector will require approximately $1 trillion in capital expenditure.

Apollo plans to focus on secured lending with strong protections.

Its direct-lending ADS strategy, with approximately $25 billion in assets, delivered an 8% annualized return since inception, outperforming high-yield investments by more than 400 basis points and investment-grade investments by 800 basis points.

Shareholder Returns And Strategic Investments

Apollo declared a quarterly dividend of $0.5625 per share. It repurchased approximately $143 million in shares during the quarter, bringing 12-month buybacks to approximately $1.4 billion.

The company also returned $2.7 billion to shareholders over the past 12 months and allocated nearly $750 million to strategic growth initiatives.

Apollo also announced a minority investment in Mubadala Capital, with the transaction expected to close in late fourth-quarter 2026, subject to approvals.

Outlook And Long-Term Growth Strategy

Apollo maintained its 2026 targets of 20% FRE growth and 10% SRE growth and expects similar growth rates in 2027.

CEO Mark Rowan on an earnings call highlighted three trends supporting the alternative investment industry: rising global investment in AI, energy and infrastructure; growing retirement-income needs as populations age; and increasing demand for private-market investments.

Apollo estimates Canada, the Gulf region and Europe could each attract approximately $1 trillion or more in infrastructure spending.

The company is expanding its reach across individual investors, insurers, traditional asset managers and retirement plans. It is also investing in systems to improve private-asset valuation, trading, custody and settlement.

Apollo expects market-making volume to exceed $40 billion by year-end and plans to launch credit custody and settlement partnerships in 2027. Its AMAPS and APADS products have reached approximately $40 billion in combined assets.

The company plans to invest approximately $350 million over the next 24 months in technology, data and market infrastructure to replace legacy systems.

APO Stock Price Activity: Apollo Global Management shares were down 4.30% at $114.32 on Tuesday.

Photo via Shutterstock