Investment in AI-resistant ‘Halo’ companies helps push UK and EU markets to record highs
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<p>Investors are shifting toward physical assets that are partially insulated from disruption, says Goldman Sachs</p><p>Investors have a new mantra as they prepare for AI to shake up the global economy – the Halo trade.</p><p>Interest in Halo – short for “heavy assets, low obsolescence” - 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.</
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Investment in AI-resistant ‘Halo’ companies helps push UK and EU markets to record highs Investors are shifting toward physical assets that are partially insulated from disruption, says Goldman Sachs Investors have a new mantra as they prepare for AI to shake up the global economy – the Halo trade. Interest in Halo – short for “heavy assets, low obsolescence” - 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. 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. 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 “asset intensity becomes a key driver of valuations and returns”. “After more than a decade of under‑investment (particularly in Europe), corporates are shifting decisively back toward physical assets,” Goldman analysts told clients. 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. “Examples include grids, pipelines, utilities, transport infrastructure, critical machinery and long cycle industrial capacity,” they said. 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 – a key measure of a stock’s performance. 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 “you still need this on Monday morning” businesses, such as utilities. “Waste collectio...
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