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Where is the safe haven? Goldman Sachs: HALO trade
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Scarce assets in the AI era! The 'HALO' trade is sweeping Wall Street. Are these seven sectors worth investing in?

Recently, the 'HALO' trading strategy has quietly gained popularity on Wall Street.
Top investment banks such as Goldman Sachs, Morgan Stanley, and Bank of America pointed out:As the replicability of AI products continues to increase, the market is gradually shifting its focus to 'hard-to-replicate physical assets' such as power grids, energy pipelines, core infrastructure, and long-term production capacity, and is re-evaluating and pricing them.
So,What exactly is the 'HALO' trade that's highly sought after by Wall Street? And what are the key investment targets investors should pay attention to?Next, this article will provide an in-depth breakdown for fellow investors.
What is HALO?
HALO stands for 'Heavy Assets, Low Obsolescence,' a concept now widely adopted by several Wall Street investment banks, including Morgan Stanley, Goldman Sachs, and JPMorgan.
1. Heavy Assets
The business model is built on a vast base of physical capital, creating high replication barriers—such as costs, regulation, construction time, engineering complexity, or network integration difficulty. Typical screening dimensions include six core indicators: tangible asset intensity, fixed asset intensity, and capital expenditure intensity.
Recently, the 'HALO' trading strategy has quietly gained popularity on Wall Street. Top investment banks such as Goldman Sachs, Morgan Stanley, and Bank of America pointed out:As the replicability of AI products continues to increase, the market is gradually shifting its focus to 'hard-to-replicate physical assets' such as power grids, energy pipelines, core infrastructure, and long-term production capacity, and is re-evaluating and pricing them. So,What exactly is the 'HALO' trade that's highly sought after by Wall Street? And what are the key investment targets investors should pay attention to?Next, this article will provide an in-depth breakdown for fellow investors. What is HALO? HALO stands for 'Heavy Assets, Low Obsolescence,' a concept now widely adopted by several Wall Street investment banks, including Morgan Stanley, Goldman Sachs, and JPMorgan. 1. Heavy Assets The business model is built on a vast base of physical capital, creating high replication barriers—such as costs, regulation, construction time, engineering complexity, or network integration difficulty. Typical screening dimensions include six core indicators: tangible asset intensity, fixed asset intensity, and capital expenditure intensity. 2. Low Obsolescence These types of assets possess long-term resilience that can endure across technological cycles, making them difficult to be easily phased out by technological iteration.Their core characteristic lies in 'extremely long replacement cycles': economic value does not...
2. Low Obsolescence
These types of assets possess long-term resilience that can endure across technological cycles, making them difficult to be easily phased out by technological iteration.Their core characteristic lies in an 'extremely long replacement cycle': their economic value does not diminish due to the rapid evolution of digital technologies, nor can they be replaced by virtual innovations such as code or algorithms in terms of their core physical functions.
Overall, Goldman Sachs stated that under the combined effects of higher real interest rates, geopolitical fragmentation, supply chain restructuring, and AI-driven capital expenditure waves, the market is undergoing a 're-pricing of scarcity.'Leadership in the stock market is returning to tangible productive assets, with the market beginning to reward capacity, networks, infrastructure, and engineering complexity, as these assets have extremely high replication costs and are not easily made obsolete by technological iteration.
Morgan Stanley’s HALO basket is constructed based on this logic,covering seven structural pillars: materials, utilities, railroads, pipelines, waste management, defense, and signal towers.Over the past year, Morgan Stanley's HALO basket has risen by 28%, while the basket of stocks 'impacted by AI disruption' fell by 43% during the same period.
Recently, the 'HALO' trading strategy has quietly gained popularity on Wall Street. Top investment banks such as Goldman Sachs, Morgan Stanley, and Bank of America pointed out:As the replicability of AI products continues to increase, the market is gradually shifting its focus to 'hard-to-replicate physical assets' such as power grids, energy pipelines, core infrastructure, and long-term production capacity, and is re-evaluating and pricing them. So,What exactly is the 'HALO' trade that's highly sought after by Wall Street? And what are the key investment targets investors should pay attention to?Next, this article will provide an in-depth breakdown for fellow investors. What is HALO? HALO stands for 'Heavy Assets, Low Obsolescence,' a concept now widely adopted by several Wall Street investment banks, including Morgan Stanley, Goldman Sachs, and JPMorgan. 1. Heavy Assets The business model is built on a vast base of physical capital, creating high replication barriers—such as costs, regulation, construction time, engineering complexity, or network integration difficulty. Typical screening dimensions include six core indicators: tangible asset intensity, fixed asset intensity, and capital expenditure intensity. 2. Low Obsolescence These types of assets possess long-term resilience that can endure across technological cycles, making them difficult to be easily phased out by technological iteration.Their core characteristic lies in 'extremely long replacement cycles': economic value does not...
What are the core assets worth watching in the 'HALO' trade?
According to Morgan Stanley’s classification and Wall Street’s market consensus, the US stock HALO concept is mainly concentrated in the following seven sectors with extremely high physical moats:
Recently, the 'HALO' trading strategy has quietly gained popularity on Wall Street. Top investment banks such as Goldman Sachs, Morgan Stanley, and Bank of America pointed out:As the replicability of AI products continues to increase, the market is gradually shifting its focus to 'hard-to-replicate physical assets' such as power grids, energy pipelines, core infrastructure, and long-term production capacity, and is re-evaluating and pricing them. So,What exactly is the 'HALO' trade that's highly sought after by Wall Street? And what are the key investment targets investors should pay attention to?Next, this article will provide an in-depth breakdown for fellow investors. What is HALO? HALO stands for 'Heavy Assets, Low Obsolescence,' a concept now widely adopted by several Wall Street investment banks, including Morgan Stanley, Goldman Sachs, and JPMorgan. 1. Heavy Assets The business model is built on a vast base of physical capital, creating high replication barriers—such as costs, regulation, construction time, engineering complexity, or network integration difficulty. Typical screening dimensions include six core indicators: tangible asset intensity, fixed asset intensity, and capital expenditure intensity. 2. Low Obsolescence These types of assets possess long-term resilience that can endure across technological cycles, making them difficult to be easily phased out by technological iteration.Their core characteristic lies in 'extremely long replacement cycles': economic value does not...
1. Material
As industry leaders with heavy assets and high production capacity barriers, their strong economies of scale and supply chain moats form a physical foundation that is difficult for virtual technologies to disrupt.
Core stocks in the US market： $Freeport-McMoRan (FCX.US)$ 、 $Southern Copper (SCCO.US)$ 、 $Nucor (NUE.US)$ 、 $Dow Inc (DOW.US)$ 、 $Martin Marietta Materials (MLM.US)$ 。
2. Public Utilities
'The endgame of AI is electricity.' The operation of computing infrastructure requires massive and uninterrupted energy support. The replacement cost of power plants and transmission grids is extremely high, and regulatory barriers are deep, leading the market to reprice them as 'AI electricity suppliers.'
Core stocks in the US market： $Southern (SO.US)$ 、 $Constellation Energy (CEG.US)$ 、 $Vistra Energy (VST.US)$ 、 $NextEra Energy (NEE.US)$ 、 $Duke Energy (DUK.US)$ 。
3. Railway
As the core infrastructure of physical logistics, North American Class I railroads own irreplaceable land-based transportation routes with strong natural monopolies.
Core stocks in the US market： $Union Pacific (UNP.US)$ 、 $CSX Corp (CSX.US)$ 、 $Norfolk Southern (NSC.US)$ 、 $Canadian Pacific Railway (CP.US)$ 、 $Canadian National Railway (CNI.US)$ 。
4. Pipelines
The leading midstream oil and gas transportation company with a cross-regional delivery network. With heavy assets and extremely high licensing barriers, it maintains a central position in the energy system.
Core stocks in the US market： $Kinder Morgan (KMI.US)$ 、 $Williams (WMB.US)$ 、 $Enterprise Products (EPD.US)$ 、 $Enbridge (ENB.US)$ 、 $MPLX LP (MPLX.US)$ 。
5. Waste management
The leader in solid waste/hazardous waste recycling, controlling scarce landfill sites, processing licenses, and operational networks. It has extremely high regional barriers and anti-cyclical capabilities.
Core stocks in the US market： $Waste Management (WM.US)$ 、 $Republic Services (RSG.US)$ 、 $Waste Connections (WCN.US)$ 、 $Clean Harbors (CLH.US)$ 、 $Casella Waste Systems (CWST.US)$ 。
6. Defense
The hardware backbone of national security and the space economy. With long R&D cycles, deep government contract barriers, and extremely high capital expenditure thresholds, these assets are not only immune to consumer-grade technology but also represent an irreplaceable physical niche in an era of great power competition.
Core stocks in the US market： $Lockheed Martin (LMT.US)$ 、 $RTX Corp (RTX.US)$ 、 $Northrop Grumman (NOC.US)$ 、 $General Dynamics (GD.US)$ 、 $L3Harris Technologies (LHX.US)$ 。
7. Signal Tower
A telecom tower and data center operator with irreplaceable site resources. As the underlying carrier of communications and AI computing power, technological iteration will not pose a threat but rather continue to catalyze its rigid demand.
Core stocks in the US market： $American Tower Corp (AMT.US)$ 、 $Crown Castle (CCI.US)$ 、 $SBA Communications Corp (SBAC.US)$ 、 $Equinix Inc (EQIX.US)$ 、 $Digital Realty Trust Inc (DLR.US)$ 。
💡 Investment tip: Don’t know which target to start researching? Leave it to Futubull AI!
By now, looking at this 'HALO' list covering seven major sectors, do you want to quickly filter out the most suitable investment target for you? Ask [Futubull AI]! Let AI become your exclusive research assistant, instantly unlocking individual stock fundamentals and major analyst ratings.
👉 You can try asking Futubull AI like this:
Help me analyze companies suitable for HALO trading, their underlying logic, and valuation.
“Compare the valuations and dividend yields of Southern Company and Waste Management. Which is more attractive?”
“Summarize Wall Street’s recent price targets and investment logic for Lockheed Martin.”
Summary
Overall, AI is accelerating the restructuring of the era. The rapid rise of the virtual world has made physical foundations like steel and power grids more precious than ever. Whether this represents a long-term shift in dominance or a rebalancing of cycles, the robust defensive nature of tangible assets is becoming an indispensable tool for investors.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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