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Why Private Equity Stocks Just Had Their Best Day in Months

MarketDash Editorial Team
10 hours ago
Private equity giants surged Tuesday as JPMorgan outlined a new era for private markets driven by AI innovation, massive infrastructure spending, and companies staying private longer than ever before.

Something interesting happened Tuesday in the world of private equity. The big names all moved together, and they moved up—sharply. It wasn't some random market hiccup. It was the kind of coordinated rally that suggests investors are beginning to see something structural shifting beneath the surface.

Apollo Global Management Inc. (APO) surged 6% to near three-month highs, marking its strongest single-day performance since the U.S.-China tariff truce back on May 12. The move also completed Apollo's full recovery from a September selloff tied to concerns around First Brands and Tricolor Holdings—worries that briefly sparked fears of broader private-equity contagion.

KKR Inc. & Co Inc (KKR) climbed 5%, extending its winning streak to six sessions. Blackstone Inc. (BX) added 4%. And Ares Management Corp (ARES) led the pack with an 8% pop, fueled in part by anticipation of its upcoming addition to the S&P 500 on December 11. For Ares, Tuesday could mark its best session since April 9, when President Donald Trump reversed course on Liberation Day tariffs.

The macro backdrop certainly helped. The CME FedWatch tool showed traders pricing in a 90% probability of a 25-basis-point rate cut on Wednesday. Polymarket odds pushed that confidence even higher, to 95%. Lower rates typically juice alternative assets, and the market was pricing that in with gusto.

JPMorgan Says Something Big Is Happening in Private Markets

But the real fuel for Tuesday's rally came from a research note published by JPMorgan Asset Management. In it, the bank outlined a sweeping thesis: 2026 will be a period of "public-private convergence," with artificial intelligence, energy transition, and a once-in-a-generation capital expenditure boom pulling both markets closer together.

The report argues that beneath the surface, we're about to see a meaningful pickup in mergers and acquisitions, a backlog of companies ready to exit, and lower interest rates acting as the catalyst the private-equity industry has been waiting for over the past two years.

JPMorgan also highlighted a structural shift that's been building quietly for years: today's leading companies are staying private far longer, especially in sectors like technology and biotech where venture capital and growth equity are expanding rapidly.

"Companies are staying private longer, enabled by the unprecedented depth and size of private markets—now estimated to be close to USD20 trillion," said Jed Laskowitz, analyst at JPMorgan Asset Management.

The implication is clear. Public investors are increasingly missing out on the earlier stages of innovation-driven returns unless they find exposure through private market vehicles. And guess what? That's exactly what firms like Apollo, KKR, Blackstone, and Ares provide.

"Innovation, especially in technology, is increasingly funded away from public exchanges," Laskowitz added.

According to JPMorgan, we're living through a "once-in-a-generation capital expenditure cycle," powered by artificial intelligence, infrastructure modernization, and the global energy transition. Those are enormous, multi-trillion-dollar themes. And they're playing out largely in private markets.

Private Equity Has Been Crushing the S&P 500

JPMorgan isn't out here alone with this thesis. Other top Wall Street banks are arriving at the same conclusion, and the numbers back it up.

Bank of America Head of Thematic Investing Heim Israel pointed out that over a 10-year horizon, private equity has beaten the S&P 500 by an average of 6 percentage points each year. That's not a small edge. That's a compounding machine.

"Remaining private could avoid the potentially higher costs and regulations associated with being public. In the time spent on financial regulation paperwork every year, 12 Great Pyramids of Giza could be built," he said in an October report.

The rise of AI has only magnified this divide. Today's most transformative innovators—OpenAI, Anthropic, SpaceX, Databricks—remain private. OpenAI alone, valued at $500 billion, would rank as the 16th largest company in the S&P 500 if it were publicly listed. Let that sink in for a moment.

Their influence extends far beyond their own business models. The AI breakthroughs pioneered by these firms are reshaping employment, productivity, infrastructure demand, and competitive dynamics across the entire global economy. And public market investors? They're largely on the sidelines.

The scramble to secure a piece of this market has forced big tech to build stakes directly. NVIDIA Corp. (NVDA), Alphabet Inc. (GOOGL) (GOOG), Microsoft Corp (MSFT), and Amazon.com Inc. (AMZN) have collectively invested in roughly 50% of the 100 AI unicorns that have emerged since ChatGPT launched in 2022.

Meet the "Private Magnificent 7"

Bank of America has even coined a term for this new elite tier of private companies: the "Private Magnificent 7." Their combined valuation has surged to $1.4 trillion—almost five times higher than in 2023.

The roster includes OpenAI at $500 billion, SpaceX at $400 billion, Anthropic at $183 billion, Databricks at $100 billion, Stripe at $92 billion, xAI at $50 billion, and Revolut at $45 billion. These aren't scrappy startups anymore. They're economic powerhouses operating outside the traditional public-market structure.

And that's where the private equity giants come in. For public-market investors who want exposure to this world—who want to participate in the AI boom, the infrastructure buildout, the energy transition—buying shares in firms like Apollo, KKR, Blackstone, or Ares is one of the few accessible ways to do it.

Tuesday's rally suggests that more investors are beginning to connect those dots. The center of gravity for innovation and returns is shifting beyond public exchanges. The private markets are where the action is, and the big private equity firms are the gatekeepers.

If this trend continues—and JPMorgan certainly thinks it will—days like Tuesday may become far more common. The question isn't whether private markets are important. It's whether you have exposure to them.

Back to News

Why Private Equity Stocks Just Had Their Best Day in Months

MarketDash Editorial Team
10 hours ago
Private equity giants surged Tuesday as JPMorgan outlined a new era for private markets driven by AI innovation, massive infrastructure spending, and companies staying private longer than ever before.

Something interesting happened Tuesday in the world of private equity. The big names all moved together, and they moved up—sharply. It wasn't some random market hiccup. It was the kind of coordinated rally that suggests investors are beginning to see something structural shifting beneath the surface.

Apollo Global Management Inc. (APO) surged 6% to near three-month highs, marking its strongest single-day performance since the U.S.-China tariff truce back on May 12. The move also completed Apollo's full recovery from a September selloff tied to concerns around First Brands and Tricolor Holdings—worries that briefly sparked fears of broader private-equity contagion.

KKR Inc. & Co Inc (KKR) climbed 5%, extending its winning streak to six sessions. Blackstone Inc. (BX) added 4%. And Ares Management Corp (ARES) led the pack with an 8% pop, fueled in part by anticipation of its upcoming addition to the S&P 500 on December 11. For Ares, Tuesday could mark its best session since April 9, when President Donald Trump reversed course on Liberation Day tariffs.

The macro backdrop certainly helped. The CME FedWatch tool showed traders pricing in a 90% probability of a 25-basis-point rate cut on Wednesday. Polymarket odds pushed that confidence even higher, to 95%. Lower rates typically juice alternative assets, and the market was pricing that in with gusto.

JPMorgan Says Something Big Is Happening in Private Markets

But the real fuel for Tuesday's rally came from a research note published by JPMorgan Asset Management. In it, the bank outlined a sweeping thesis: 2026 will be a period of "public-private convergence," with artificial intelligence, energy transition, and a once-in-a-generation capital expenditure boom pulling both markets closer together.

The report argues that beneath the surface, we're about to see a meaningful pickup in mergers and acquisitions, a backlog of companies ready to exit, and lower interest rates acting as the catalyst the private-equity industry has been waiting for over the past two years.

JPMorgan also highlighted a structural shift that's been building quietly for years: today's leading companies are staying private far longer, especially in sectors like technology and biotech where venture capital and growth equity are expanding rapidly.

"Companies are staying private longer, enabled by the unprecedented depth and size of private markets—now estimated to be close to USD20 trillion," said Jed Laskowitz, analyst at JPMorgan Asset Management.

The implication is clear. Public investors are increasingly missing out on the earlier stages of innovation-driven returns unless they find exposure through private market vehicles. And guess what? That's exactly what firms like Apollo, KKR, Blackstone, and Ares provide.

"Innovation, especially in technology, is increasingly funded away from public exchanges," Laskowitz added.

According to JPMorgan, we're living through a "once-in-a-generation capital expenditure cycle," powered by artificial intelligence, infrastructure modernization, and the global energy transition. Those are enormous, multi-trillion-dollar themes. And they're playing out largely in private markets.

Private Equity Has Been Crushing the S&P 500

JPMorgan isn't out here alone with this thesis. Other top Wall Street banks are arriving at the same conclusion, and the numbers back it up.

Bank of America Head of Thematic Investing Heim Israel pointed out that over a 10-year horizon, private equity has beaten the S&P 500 by an average of 6 percentage points each year. That's not a small edge. That's a compounding machine.

"Remaining private could avoid the potentially higher costs and regulations associated with being public. In the time spent on financial regulation paperwork every year, 12 Great Pyramids of Giza could be built," he said in an October report.

The rise of AI has only magnified this divide. Today's most transformative innovators—OpenAI, Anthropic, SpaceX, Databricks—remain private. OpenAI alone, valued at $500 billion, would rank as the 16th largest company in the S&P 500 if it were publicly listed. Let that sink in for a moment.

Their influence extends far beyond their own business models. The AI breakthroughs pioneered by these firms are reshaping employment, productivity, infrastructure demand, and competitive dynamics across the entire global economy. And public market investors? They're largely on the sidelines.

The scramble to secure a piece of this market has forced big tech to build stakes directly. NVIDIA Corp. (NVDA), Alphabet Inc. (GOOGL) (GOOG), Microsoft Corp (MSFT), and Amazon.com Inc. (AMZN) have collectively invested in roughly 50% of the 100 AI unicorns that have emerged since ChatGPT launched in 2022.

Meet the "Private Magnificent 7"

Bank of America has even coined a term for this new elite tier of private companies: the "Private Magnificent 7." Their combined valuation has surged to $1.4 trillion—almost five times higher than in 2023.

The roster includes OpenAI at $500 billion, SpaceX at $400 billion, Anthropic at $183 billion, Databricks at $100 billion, Stripe at $92 billion, xAI at $50 billion, and Revolut at $45 billion. These aren't scrappy startups anymore. They're economic powerhouses operating outside the traditional public-market structure.

And that's where the private equity giants come in. For public-market investors who want exposure to this world—who want to participate in the AI boom, the infrastructure buildout, the energy transition—buying shares in firms like Apollo, KKR, Blackstone, or Ares is one of the few accessible ways to do it.

Tuesday's rally suggests that more investors are beginning to connect those dots. The center of gravity for innovation and returns is shifting beyond public exchanges. The private markets are where the action is, and the big private equity firms are the gatekeepers.

If this trend continues—and JPMorgan certainly thinks it will—days like Tuesday may become far more common. The question isn't whether private markets are important. It's whether you have exposure to them.