As investors prepare for AI to shake up the global economy, they have a new mantra – hello business.
Interest in HALO – short for “asset heavy, low obsolescence” – has surged as investors look for companies with tangible, productive assets that may be insulated from AI disruption, such as energy and transportation infrastructure companies.
While 2026 got off to a rough start for US mega-cap tech companies, Halo trading helped push UK and EU stock markets to record highs by the end of February.
Goldman Sachs reported this week that its basket of 100 big-spending companies has outperformed a similar group of capital-poor firms by 35% since 2025, as “asset intensity becomes the key driver of valuations and returns”.
“After more than a decade of underinvestment (especially in Europe), corporates are decisively moving back toward physical assets,” Goldman analysts told clients.
Goldman defines halo businesses as businesses that combine substantial physical capital (where barriers to replication include cost, regulation, time to build, or engineering complexity) with long-term economic relevance. “Examples include grids, pipelines, utilities, transportation infrastructure, critical machinery and long-cycle industrial capacity,” he said.
They calculate that the valuation gap between capital-intensive and capital-light businesses in Europe has narrowed significantly, with capital-intensive firms now rated more highly on a price-to-earnings basis – a key measure of stock performance.
Ruben Delfovo, an investment strategist at Saxo, said energy infrastructure companies and oil and gas majors, which have control over the entire supply chain, are examples of halo companies, as well as “you still need it on Monday morning” businesses like utilities.
“Waste collection, water services and regulated electricity networks rarely dominate dinner party chat. They appear when investors stop paying for excitement and start paying for reliability,” Delfovo said.
The FTSE 100, which is comprised of relatively old-economy companies, is set to reach a record high in 2026. February was the blue-chip stock index’s strongest month since November 2022, and its eighth consecutive monthly gain.
““Investors are moving from expensive AI and growth stocks to businesses with tangible infrastructure and long-lived assets – energy, materials, industrial, shipping and other ‘real world’ enterprises,” said Ipek Ozkardeyskaya, a senior analyst at Swissquote.
“In this context, the FTSE 100 is well-positioned to benefit from halo inflows, driven by energy and mining names rallying from record to record,” Ozkardeskaya said.
The pan-European Stocks 600 stock index also hit a record high last week, helped by a move from US technology stocks to other sectors.
Cyprus-based oil tanker shipping company Frontline is the best-performing member of the Stoxx 600, up 57% so far this year. Norway’s Kongsberg Gruppen, which sells high-tech systems to marine, aerospace, defense and energy producers, is up 46% since the beginning of January.
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.
Last week, analysts at Citini Research sent the markets into a tizzy with a speculative report outlining a future in which autonomous AI systems upend the entire US economy, from jobs to markets to mortgages, increasing unemployment and impacting the stock market.
