Investors have a new mantra as they prepare for AI to shake up the global economy \u2013 the Halo trade.<\/p>\n
Interest in Halo \u2013 short for \u201cheavy assets, low obsolescence\u201d – has risen as investors seek out companies with tangible, productive assets, which might be insulated from AI disruption, such as energy and transport infrastructure companies.<\/p>\n
While US mega-cap tech companies have had a rough start to 2026, the Halo trade helped to push UK and EU stock markets to record levels by the end of February.<\/p>\n
Goldman Sachs reported this week that its basket of more than 100 big-spending companies had outperformed a similar grouping of capital-light firms by 35% since 2025, as \u201casset intensity becomes a key driver of valuations and returns\u201d.<\/p>\n
\u201cAfter more than a decade of under\u2011investment (particularly in Europe), corporates are shifting decisively back toward physical assets,\u201d Goldman analysts told clients.<\/p>\n
Goldman defined Halo businesses as ones which pair substantial physical capital (where barriers to replication include cost, regulation, time to build or engineering complexity) with long-lived economic relevance. \u201cExamples include grids, pipelines, utilities, transport infrastructure, critical machinery and long cycle industrial capacity,\u201d they said.<\/p>\n
They have calculated that the valuation gap between capital-intensive and capital-light businesses in Europe has narrowed significantly, with capital-intensive firms now more highly rated on a price-to-earnings basis \u2013 a key measure of a stock\u2019s performance.<\/p>\n
Ruben Dalfovo, an investment strategist at Saxo, said energy infrastructure companies and oil and gas majors with control over their entire supply chain are examples of Halo companies, along with \u201cyou still need this on Monday morning\u201d businesses, such as utilities.<\/p>\n
\u201cWaste collection, water services and regulated power networks rarely dominate dinner party chat. They tend to show up when investors stop paying for excitement and start paying for reliability,\u201d Dalfovo said.<\/p>\n
The FTSE 100, which is relatively stacked with old economy companies, has hit a series of record highs in 2026. February was the blue-chip stock index\u2019s strongest month since November 2022, and its eighth monthly gain in a row.<\/p>\n
\u201cInvestors are rotating from expensive AI and growth stocks into businesses with tangible infrastructure and long-lived assets \u2013 energy, materials, industrials, shipping and other \u2018real world\u2019 enterprises,\u201d said Ipek Ozkardeskaya, a senior analyst at Swissquote.<\/p>\n
\u201cIn this context, the FTSE 100 is well positioned to benefit from Halo inflows, rallying from record to record, driven by energy and mining names,\u201d Ozkardeskaya added.<\/p>\n
The pan-European Stoxx 600 share index also hit record highs last week, helped by a rotation out of US technology stocks into other sectors.<\/p>\n
Cyprus-based oil tanker shipping company Frontline is the best-performing member of the Stoxx 600 so far this year, up 57%. Norway\u2019s Kongsberg Gruppen, which sells high-tech systems to marine, aerospace, defence and energy producers is up 46% since the start of January.<\/p>\n
In contrast, software and data-focused companies have come under pressure in recent weeks, as AI companies have added services that threaten their revenue models.<\/p>\n
Last week, analysts at Citrini Research rattled the markets with a speculative report outlining a future in which autonomous AI systems had upended the entire US economy, from jobs to markets and mortgages, driving up unemployment and hammering the stock market.<\/p>\n","protected":false},"excerpt":{"rendered":"Investors have a new mantra as they prepare for AI to shake up the global economy \u2013 the…\n","protected":false},"author":2,"featured_media":307708,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[365,363,364,111,139,69,145],"class_list":{"0":"post-307707","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-new-zealand","12":"tag-newzealand","13":"tag-nz","14":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/307707","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=307707"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/307707\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/307708"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=307707"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=307707"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=307707"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}