Bullish CEOs are betting a wave of investment will prop up growth despite war in Iran

At Milken, top executives struck an optimistic tone despite Iran-war disruption and near-doubling oil prices, arguing the U.S. and global economies are still powering through. They see AI infrastructure spending as a major productivity driver, private credit as non-systemic, and real estate/infrastructure as improving as rates normalize. The main caution was AI-related job disruption and high government deficits, but overall positioning was constructive rather than risk-off.

Analysis

The market is being asked to look through a geopolitical spike in input costs and focus on capex-led nominal growth, but the key second-order effect is that persistent energy inflation can actually accelerate the AI/infrastructure trade rather than kill it. If management teams keep treating the shock as transitory, the beneficiaries are the firms selling picks-and-shovels to hyperscalers and digital infrastructure owners with pricing power; the losers are labor-intensive businesses with weak pass-through and long-duration consumer exposure. The risk is not recession today, but margin compression in the next 2-3 quarters as freight, power, and insurance costs leak into project economics.

Private credit looks resilient on the surface, but a higher-rate-for-longer backdrop plus redemption pressure means dispersion will widen sharply across managers. The cleaner second-order read is that capital scarcity should favor managers with deep sponsor relationships and low-duration underwriting, while forcing weaker platforms to accept lower fees or reduce leverage targets. That creates a relative-value setup in listed asset managers versus economically sensitive lenders: the best franchises can harvest spread and dry powder, while less diversified players face AUM flight and mark-to-market skepticism.

Real estate is the most interesting contrarian here. If capital remains constrained and construction starts keep lagging, the next 12-24 months could bring a supply reset in selected property types even before rates normalize materially; that is bullish for high-quality office-adjacent logistics, data center land positions, and owners with low refinancing risk. The consensus may be overestimating how quickly "AI capex" translates into near-term productivity, but underestimating how much it re-routes power demand, fiber, land, and permitting bottlenecks into the winning factor exposures.

The main tail risk is that the optimistic narrative breaks if war-driven energy costs persist long enough to dent consumer spending and force corporates to pause capex. A second break point is AI overbuild: if data center spending overshoots actual workloads, the market could de-rate the entire digital infrastructure complex within 6-12 months. For now, the setup still favors owners of scarce real assets and diversified asset gatherers over highly levered credit or rate-sensitive cyclicals.

Key Decisions for Investors

• Long BX vs short a basket of regional/lower-quality private credit lenders for the next 3-6 months: BX should benefit from fundraising stability and distressed origination optionality, while weaker lenders face redemption and spread-discipline pressure.
• Initiate a tactical long in infrastructure/digital-asset exposure via BX or diversified infrastructure proxies for 6-12 months, but size modestly; the trade works if power, fiber, and permitting constraints keep pricing power intact, and stops if AI capex growth decelerates sharply.
• Add a real estate relative-value pair: long industrial/logistics and select REITs with low refinancing needs, short highly leveraged office proxies, over 6-12 months. The supply squeeze thesis improves as new development capital remains scarce.
• Short duration-sensitive consumer/discretionary names against energy/AI winners for 1-2 quarters: rising gasoline and utility costs are a latent margin tax that the market is still underpricing.
• Hold a hedge via long-dated downside in data-center-heavy equities or call spreads on an infrastructure ETF if valuations expand faster than utilization; this protects against a 6-12 month AI capex air pocket.