Investors Are Rushing Toward the 'HALO' Strategy. Here's What This Involves and Which Assets They're Acquiring

Main Insights

• Several of last year's top-performing AI-related stocks have recently struggled, as concerns about the effects of artificial intelligence grow. At the same time, sectors considered resistant to AI disruption have seen gains.

• This trend has led to the emergence of a new Wall Street acronym: "HALO," which stands for "heavy assets, low obsolescence."

Wall Street has adopted a fresh term to describe the recent shift away from AI-focused investments: the "HALO" trade.

Coined by Josh Brown, CEO of Ritholtz Wealth Management, "HALO" refers to investments in substantial physical assets that are largely immune to AI disruption. These assets have recently outperformed, while some former AI favorites have faltered due to mounting concerns about the technology's impact.

What Is the HALO Trade?

According to Brown, HALO stocks are those tied to tangible, durable assets—businesses you can invest in with confidence that AI is unlikely to undermine them. Examples he highlighted include major oil producers like ExxonMobil (XOM), fast food leader McDonald’s (MCD), and retail giant Walmart (WMT), all of which have posted strong gains this year.

Why Does This Matter?

With doubts growing about whether large-scale AI investments by tech giants will deliver the expected returns—and as AI continues to disrupt various industries—investors are increasingly seeking ways to shield their portfolios from these risks. This defensive strategy is shaping up to be a key investment theme this year.

As of Wednesday's market close, ExxonMobil shares had risen roughly 25% since the start of the year, Walmart had advanced 15%, and McDonald's was up nearly 9%. Sectors such as energy, materials, and consumer staples have been among the strongest performers in 2026, while technology stocks have lagged behind.

Meanwhile, Nvidia (NVDA)—a leading AI chip manufacturer—has seen its stock decline over the past week, despite reporting stellar earnings. So far in 2026, Nvidia's shares remain in negative territory. The Roundhill Magnificent Seven ETF (MAGS), which includes Nvidia and other major tech firms, has dropped 6% this year.

Goldman Sachs analysts recently told clients that companies with significant physical assets—the so-called HALO firms—could continue to outperform, as their earnings momentum builds. Current projections indicate that these capital-heavy businesses are expected to see faster profit growth and improved returns on investment, while companies with lighter asset bases may see little change in earnings.

They noted, "Rising real yields, geopolitical tensions, and changes in global supply chains have shifted market leadership toward businesses with substantial, productive assets. Investors are favoring companies with capacity, infrastructure, and engineering expertise—assets that are expensive to duplicate and less vulnerable to technological change."