Blackstone (BX) Stock Could Be 24% Undervalued Following AI Data Center Expansion

Blackstone has delivered a 43.6% gain over the past three years, yet a key question now is whether the current share price is properly matched to the returns the firm earns on its capital. With the business leaning further into AI infrastructure, energy transition assets and more complex financing deals, the stock asks investors to judge not just growth stories but also the quality of the underlying capital allocation.

• A 43.6% return over three years places meaningful emphasis on the idea that Blackstone can continue turning its capital base into incremental returns for shareholders.
• The push into AI focused data centers, energy transition platforms and high yield chip financing can reshape how quickly invested capital comes back through fees, realizations and distributions, as well as how much risk sits behind those flows.
• If you'd rather focus on earnings, this one's for you. See why Blackstone's 26.5x P/E tells a different valuation story.

For investors, the debate is whether the level of returns Blackstone earns on its capital today is strong and durable enough to justify the current price tag on the stock.

To pressure test Blackstone's current pricing against how it uses capital, it can help to compare it with a wider set of AI focused infrastructure opportunities using 55 AI infrastructure stocks.

Is Blackstone Still Cheap on Excess Returns?

The Excess Returns model looks at how effectively Blackstone turns each dollar of equity into earnings above its own cost of capital. For Blackstone, the inputs point to a business that has been pricing its capital aggressively, with an average return on equity of 46.36% compared with a modeled equity cost of $1.29 per share. That leaves an excess return of $6.10 per share on a stable earnings base of $7.38 per share, off a current book value of $11.63 and a projected stable book value of $15.92 per share.

In plain terms, the model indicates that Blackstone is expected to keep earning well above what its capital theoretically needs to make. That stream of excess profit is then compared with the share price of $117.97 today. The Excess Returns projections put Blackstone's estimated intrinsic value meaningfully above the current share price, and the recent reset in some real estate valuations helps explain why the market may still be cautious even as AI heavy infrastructure and specialty financing remain key contributors. Find out what Blackstone could be worth using our Excess Returns estimate.

The Blackstone Narrative: What Would Justify Today's Price?

Simply Wall St Narratives pick up where the Blackstone valuation puzzle leaves off by spelling out which growth, margin and earnings paths would need to hold for the stock to be worth meaningfully more or less than today’s price. Each one turns Blackstone's implied fair value into a thesis about the business that you can come back to over time, instead of a single static snapshot, and they live on the Community page.

Community views on Blackstone are split between those who see more upside left and those who think a lot is already baked in.

Bull case: 16% undervalued

"Growth in insurance partnerships, with insurance AUM at US$290b across 40 solutions clients and new mandates such as the roughly US$10b private credit and real estate partnership with Nippon Life, creates a larger base of capital light fee streams..."

Discover why this Narrative puts Blackstone at 16% undervalued.

Bear case: roughly fairly valued

"While Blackstone is reporting strong firmwide inflows and profit growth, persistent net outflows in BCRED after repurchase requests exceeded the 5% quarterly limit and only about half were met could signal product fatigue..."

Explore why this Narrative puts Blackstone at roughly fairly valued.

The Blackstone story still hinges on who is steering it

All the numbers around Blackstone only go so far until you know who is setting the priorities, writing the playbook and how their pay packets line up with your outcomes. See who runs Blackstone and how they are paid.

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