By Brookfield stock has slumped in the past few months, mirroring the performance of other companies in the alternative investing industry. BN has slumped in the last seven consecutive weeks, moving to its lowest level since May last year. So, is this slump a good buying opportunity?
Brookfield stock has slumped amid rising risks
Brookfield Corporation is one of the biggest players in the alternative asset industry, where it offers solutions like private equity and credit solutions. It has over $1 trillion in assets, and has stakes in hundreds of companies globally.
Brookfield stock has slumped in the past few weeks because of the ongoing jitters in the private credit industry, where redemptions have continued. This also explains why top companies in the industry like Apollo Global, Blackstone, Ares, and KKR have retreated.
At the same time, investors are souring on companies with an exposure in the artificial intelligence industry. Brookfield is a top investor in the sector, including its partnership with Kuwait Investment Authority and Nvidia. This deal aims to raise $100 billion to invest across the AI value chain.
Brookfield also has a $20 billion joint venture with Qai, a company owned by Qatar Investment Authority. This deal seeks to build AI infrastructure projects in the country. It is also helping to fund Bloom Energy, a company that provides power solutions to data centers.
Brookfield is also one of the companies that Nvidia has tapped to finance chip purchases in a deal worth over $500 billion. Its clients will tap into these resources and accelerate the AI boom.
Brookfield’s business is doing well
Despite the challenges, all signs are that Brookfield’s business is doing well this year, with its fundraising continuing. It raised $98 billion in capital in the second quarter of the year and deployed $100 billion into large-scale opportunities.
Notably, its fee-related earnings rose by 20%, helped by a 19% surge in fee-bearing capital to $672 billion. At the same time, its wealth solutions business is doing well, with its insurance assets rising to $191 billion.
Analysts believe that the company has more room to grow, with its annual revenue this year expected to rise to 12.9% to $6.83 billion. It will then jump by 35% next year to over $9.2 billion.
Analysts are also bullish on Brookfield stock. Scotiabank maintained its sector outperform rating and target of $54. Morgan Stanley and JPMorgan have an overweight, while TD has a buy rating. The average estimate among analysts is $56.36, up by 55% from the current level.
Brookfield stock technical analysis
BN stock chart | Source: TradingView
The daily chart shows that the BN stock peaked at $49.28 in January this year. It formed a triple-top-like pattern and a neckline of $37.80, its lowest level in March this year.
The stock has recently dropped below $37.80, a sign that bears have prevailed. It has also formed a death cross pattern as the 50-day moving average dropped below the 200-day moving averages.
The Average Directional Index (ADX) has jumped to 40, its highest level in over a year. Therefore, the stock will likely continue falling in the near term as sellers target the key support level of $30. It will likely bounce back over time as investors buy the dip.
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