Apollo Global Management (APO) Stock: Why It’s a Long-Term Buy

9/2/2025 Disclosure: I have a long position in APO stock

Apollo Global Management (NYSE: APO) is one of the world’s largest alternative asset managers, overseeing roughly $840 billion in assets under management. Its business segments include credit, retirement services, and private equity, both real assets and traditional PE. APO shares are down nearly 17.86% percent year-to-date. The weakness reflects short-term volatility in earnings and broader sector headwinds rather than deterioration in the underlying business. In this article, I'll examine Apollo’s business model and how it makes its money, the drivers behind the stock’s decline this year, market sentiment, and the balance of risks and rewards for investors. I believe APO stock at the current price is a solid long-term buy given its consistent previous returns and the lack of change in its successful business model.

Apollo earns its income through three primary sources: fee-related earnings (FRE), spread-related earnings (SRE) from its insurance arm Athene, and principal investing income (PII). Fee-related earnings are generated from management and advisory fees linked to Apollo’s massive AUM base, supplemented by capital solutions and performance fees. These revenues are highly stable and provide the firm with an annuity-like stream of income. Apollo manages $690 billion in credit investments that include Corporate Credit and Asset-backed finance. The corporate credit investments include direct lending, investment grade bonds, high yield bonds and preferred equity. Furthermore, the asset backed finance investments include securitized products, warehouse financing, asset portfolios etc. In the second quarter of 2025, FRE reached a record $627 million, up 22 percent year-over-year, following a first-quarter result of $559 million, which was itself up 21 percent from the prior year. Spread-related earnings, the second and often most significant contributor, come from Athene’s retirement services platform. Athene earns a spread between the yield on its invested assets and the cost of policyholder liabilities. With over $400 billion in assets, this business provides Apollo with recurring earnings power that is somewhat insulated from market volatility, so long as credit defaults remain low. Principal investing income, while a smaller and more volatile component, allows Apollo to participate directly in the upside of investments alongside its clients. 

Despite the strength of these businesses, Apollo’s share price has struggled in 2025. In the first quarter, GAAP accounting showed $828 million in investment-related losses at Athene, the result of mark-to-market volatility in its bond portfolio. These were largely unrealized and expected to reverse if assets are held to maturity, but they weighed on investor sentiment. As long as the default risk remains low this is just a short term valuation issue and the upside is still there long term. The timing compounded matters: in early April, former President Trump announced a new wave of tariffs, sparking a market-wide selloff that pushed Apollo to its year-to-date low. While Apollo’s Q4 2024 results (reported March 31) missed analyst expectations on revenue and AUM despite beating on adjusted net income. Then in Q1 2025, adjusted net income of $1.12 billion contrasted sharply with GAAP income of just $418 million, reinforcing concerns about headline volatility. Together, these factors explain why the stock trades lower despite underlying earnings strength.

Looking at the technical indicators and signals, Apollo’s stock remains under pressure. The share price is near $135.84, below both the 50-day moving average of $142 and the 200-day moving average of $151, signaling weakness in both the short and intermediate term. The relative strength index (RSI) sits around 38, which suggests the stock is approaching oversold territory and could be due for a rebound if fundamentals or sentiment improve. On the downside, support is found near $130, with a stronger floor at $120 if selling pressure intensifies. On the upside, resistance lies first at $142 and then at $151. A break above these levels would indicate a reversal of the recent downtrend. While the technicals are soft, analyst sentiment remains favorable. Wall Street’s consensus price targets cluster between $160 and $170, implying upside of 20 to 25 percent from current levels. Firms including Goldman Sachs, Evercore, and Citi all maintain buy or outperform ratings, reflecting confidence that Apollo’s fundamentals will eventually outweigh short-term pressures.

The main risks facing Apollo stem from interest rate policy, credit quality, and private equity market conditions. Lower interest rates, if sustained, would compress Athene’s reinvestment yields, reducing spread-related earnings. A significant rise in corporate defaults would create real economic losses across Apollo’s credit book, not just the accounting volatility that investors are accustomed to. More broadly, alternative asset managers as a group have underperformed in 2025, weighing on valuations across the sector. On the other hand, the rewards are considerable. The company is making strides in origination; there could be an expansion of investment into private vehicles with the inclusion into 401ks. Apollo is at the center of two structural growth stories: the rise of private credit as banks retrench and the secular expansion of retirement savings. Fee-related earnings have grown steadily and reached record levels, showing resilience and scalability. Athene continues to post strong inflows, adding over $20 billion in a single quarter, which directly expands the asset base generating spreads. Analyst price targets suggest meaningful upside, and Apollo’s opportunistic deployment of capital into distressed public debt during recent tariff-related volatility positions it to benefit when markets stabilize.

Apollo combines scale, diversification, and consistent earnings power in a way that few competitors can match. Although the stock is down almost 18% year to date, the weakness reflects accounting noise and macro turbulence rather than deterioration in the underlying business. CEO Marc Rowan has mentioned on the discussion of Q2 earnings that the credit assets from 2020 are starting to phase out and eventually perhaps next year onward the fees from spread in Athene should start to increase. Management fees are reaching new records, Athene continues to grow its asset base through strong inflows, and the firm’s $840 billion platform remains well positioned to capture long-term growth in private credit and retirement services. With a 10-year annualized return of nearly 27 percent, Apollo has outperformed the SP 500 by a significant amount. In addition, with analyst targets pointing to 20 to 30 percent upside, Apollo offers a compelling opportunity for patient investors as a long-term investment.