What is the 'HALO' trade investors are favoring?

The 'HALO' trade, coined 'heavy assets, low obsolescence,' refers to investors moving towards companies like factory owners, fast-food restaurants, and commodity firms perceived as stable against AI disruption.

Which stock market sectors are currently benefiting from this investor shift?

Sectors like industrials, materials, utilities, and consumer staples have surged as investors move away from perceived AI disruption threats.

How is investor sentiment changing regarding AI stocks?

Investors are becoming more discerning, shifting away from broad AI bets towards companies that can prove their resilience and value in the face of potential technological disruption.

Home / Business and Economy / Investors Flee AI Hype for 'HALO' Assets

Investors Flee AI Hype for 'HALO' Assets

22 Feb

•

Summary

Investors are moving from AI stocks to stable companies.
The 'HALO' trade favors heavy assets with low obsolescence.
Information technology sectors have declined recently.

Investors Flee AI Hype for 'HALO' Assets

U.S. investors are pivoting from artificial intelligence stocks to companies with "heavy assets, low obsolescence" (HALO), a trend dubbed the 'AI immunity trade.' This shift sees traditional industries like manufacturing, fast food, and commodities gaining favor over perceived AI disruptors.

In the past month, sectors such as industrials, materials, and consumer staples have outperformed the broader market, while the information technology sector has lagged. This rotation intensified after AI startups announced tools that could automate legal and research tasks, leading to significant value erosion in software and financial stocks.