As artificial intelligence technology rapidly reshapes industries and erodes competitive advantages in software and algorithms, the valuation logic in capital markets is also shifting. A category of assets known as "HALO"—characterized by heavy assets and low obsolescence—has gained prominence, attracting significant investor interest.
HALO stands for "Heavy Assets, Low Obsolescence." The rise of this concept reflects a fundamental change in investment logic driven by the AI revolution. Traditional heavy-asset companies with high entry barriers and tangible capital that are difficult for AI to replace are once again drawing global investor attention. Key sectors include energy and power grids, energy storage, critical strategic resources, and advanced manufacturing.
The rapid emergence of HALO assets as a central focus in global capital markets is not accidental but the result of multiple converging factors. Three main reasons can be identified:
First, the deep integration of AI applications is triggering industry reshuffles, increasing profit uncertainty in light-asset sectors. As AI breakthroughs lead to large-scale adoption, they are not only transforming business models across sectors but also disrupting traditionally "light-asset, high-growth" industries. Fields such as conventional software services and basic data processing, which rely on human labor and simple technology, face rapid replacement by AI agents, leading to decreased profit stability. Investors, seeking to mitigate risk, are reducing allocations to such assets.
Second, the AI boom is creating urgent demand for energy infrastructure, with overseas energy constraints highlighting the value of HALO assets. The rapid expansion of the AI industry is accompanied by surging electricity needs. Projections indicate that by 2026, AI-related power consumption will account for a significantly larger share globally. However, many regions abroad face infrastructure limitations, including lagging grid expansion and shortages of key power equipment, making increased investment in energy infrastructure inevitable.
Third, shifting macroeconomic conditions and market logic are leading to a repricing of the strategic scarcity of heavy assets. In the past, low interest rates and high liquidity favored light-asset, high-growth investments. Today, with supply chain localization trends becoming more pronounced, the strategic value of heavy-asset industries with high barriers and stable cash flows is being recognized. HALO assets, with their "heavy-asset, low-obsolescence" traits, align with market demand for stable value appreciation and fit long-term investment strategies. Examples include power transformers, infrastructure supporting AI computing centers, and core industrial manufacturing equipment—assets that are hard to replicate quickly, have long lifecycles, and are resilient to technological disruption, maintaining value across multiple tech cycles.
This year's government work report proposed the implementation of large-scale intelligent computing clusters, coordinated computing-power and electricity initiatives, and enhanced nationwide computing resource monitoring and scheduling, alongside support for public cloud development. These policies provide clear direction for the HALO asset sector. The more AI advances, the more it depends on physical infrastructure. Shifting capital from light assets to tangible, irreplaceable hard assets represents a rational strategy to avoid volatility and pursue long-term certainty in today's market.
Moreover, valuation logic in capital markets consistently aligns with industrial trends. The strong rise of HALO assets not only signals a return to intrinsic value but also underscores the core competitiveness of physical assets in the technology era.
For investors, it is crucial to seize opportunities arising from industrial transformation in the AI era, rationally assess the long-term value of HALO assets, and focus on high-quality targets with core barriers and stable cash flows. For related companies, leveraging policy support to enhance technological innovation, expand production capacity, and improve operational efficiency will help unlock the full potential of HALO assets. Empowered by industrial trends, policy backing, and capital flows, HALO assets are poised to become a key engine for high-quality development in capital markets, providing solid support for economic transformation and upgrading.
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