Brookfield Asset Management: Reasonably Valued, But AI Tailwinds Could Justify A Higher Valuation

Brookfield Asset Management is rated a buy, supported by robust Q2 earnings, record fundraising, and accelerating AI infrastructure investments. BAM reported fee-related earnings up 20% year-over-year, record $77 billion fundraising, and significant growth in fee-bearing capital and margins. Strategic AI partnerships and acquisitions position BAM to benefit from global AI infrastructure buildout, leveraging its balance sheet strength and $149 billion dry powder.

While shares are not a bargain and near-term volatility is expected, long-term re-rating is possible if BAM successfully monetizes AI-driven growth.

Over the past year, it's been tough for asset managers, with many underperforming, primarily due to persistent inflation and private credit concerns due to rising uncertainty from higher-for-longer interest rates. Asset managers have