Goldman Sachs strategists indicate that as investors seek safe havens to avoid risks associated with AI disruption, stocks of companies with substantial physical production assets are outperforming the broader market. The Goldman Sachs team reports that since the beginning of 2025, a basket of capital-intensive stocks—whose economic value primarily derives from tangible assets—has outperformed a portfolio of light-asset stocks, which rely more on human or digital capital, by approximately 35%. In a client report, the team noted that investors are increasingly shifting toward stocks exhibiting what the strategists term the "HALO effect." These companies are characterized by heavy asset bases and low obsolescence risk, and are predominantly found in sectors such as utilities, basic resources, and energy. The "HALO effect" introduced by Goldman Sachs does not refer to the psychological halo effect, but rather describes a trend where, amid rapid AI advancement and rising technological uncertainty, capital is showing a preference for companies with "Heavy Assets, Low Obsolescence." These are firms dependent on physical assets, infrastructure, and real production capacity, which are difficult for AI to replace in the short term. This risk-averse preference has granted these stocks a premium and relatively stronger performance compared to light-asset companies that are more vulnerable to technological disruption. Goldman Sachs uses the term HALO to summarize this structural capital flow and corresponding market pricing shift. The report was authored by a team including Guillaume Jaisson. Jaisson wrote, "The market is rewarding production capacity, networks, infrastructure, and engineering complexity—assets that are costly to replicate and less susceptible to rapid technological obsolescence." In its European capital-intensive stock portfolio, Goldman Sachs selected companies such as ASML Holding NV, Safran, LVMH, Air Liquide, and Airbus. The light-asset portfolio, by contrast, included L'Oréal, Adyen, DSV, and Siemens Healthineers. Concerns about AI applications disrupting business models have swept across multiple industries, from software to asset management, triggering significant declines in stocks previously considered stable winners. These concerns have evolved into indiscriminate selling, spreading even to sectors like logistics, which on the surface do not appear particularly vulnerable to AI disruption. The strategists also pointed out that competition for AI leadership is transforming previously high-performing light-asset companies—the so-called "super scalers"—into capital-intensive models. These companies, including Amazon, Microsoft, Alphabet, Meta Platforms, and Oracle, are projected to invest approximately $1.5 trillion in building AI infrastructure between 2023 and 2026. This compares to a cumulative investment of about $600 billion prior to 2022. The Goldman Sachs team added that higher real yields, along with geopolitical factors driving increased fiscal spending and manufacturing support, are also directing capital toward capital-intensive industries. Meanwhile, earnings momentum is shifting in favor of such companies, with consensus estimates for earnings per share growth and return on equity now exceeding those of light-asset firms. Strategists at Morgan Stanley similarly observed that the market is moving away from light-asset sectors like software. In a report issued Monday, they noted that by the end of 2025, long-term capital in Europe had begun reducing allocations to stocks facing AI disruption risks.
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