Analyst on How to Hedge AI Circular Financing Risks: Short Blue Owl Capital (OWL)

We recently published 10 Trending Stocks to Watch as Brad Gerstner Explains Tailwinds for AI Trade – ’10x Manhattan Project’. Blue Owl Capital Inc (NYSE:OWL) is one of the trending stocks to watch.

During a recent podcast on Bloomberg, James Van Geelen, the founder and portfolio manager at Citrini Research, was asked how to hedge the risks related to “circular financing” in the AI space. Here is what the analyst said:

“You could buy all the real companies that are building this kind of data center and then you could short Blue Owl and the private credit companies that are doing the kind of financing aspect of it. Because if it goes bad, they have limited upside and kind of unlimited downside. And if it continues happening, the companies that are actually building it have unlimited op upside and they’re still, like you said, these old line kind of industrial that like they still have a core business to go back to.”

While we acknowledge the potential of finding ways to make money by shorting stocks, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.