AI Stocks: The HALO Trade As A Hedge Against The AI Sell-Off

After investors spent years pouring money into AI stocks, the newly coined “HALO” trade is gaining credence on Wall Street, as a hedge against the impact artificial intelligence is broadly projected to have on the economy, as well as on stocks.

An acronym for “Heavy Asset, Low Obsolescence,” the HALO trade aims to help safeguard investors’ money as a new sort of safe haven: companies whose assets include huge and long-lived physical infrastructure. Such massive physical assets act as moats, the thinking goes, defenses that prospective or existing competitors are unlikely to penetrate, and a kind of hands-on capability that can’t be replaced by AI.

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The HALO trade includes stocks like Newmont (NEM), the world’s largest gold miner, energy companies like Exxon (XOM) and Valero (VLO), and industrials as varied as Deere (DE) and the midcap HVAC installation and repair company Comfort Systems (FIX). Even consumer staples like McDonald’s (MCD) are back in vogue.

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Some of those stocks, like Newmont, Exxon and Valero, are up recently because of unrelated macro factors such as oil prices rising as a result of the Middle East conflict and an ensuing flight to traditional safe-haven assets like gold. Newmont and Exxon are up about 25% year to date, while Valero has gained around 30%.

Deere and Comfort Systems are both up over 25%. Meanwhile, McDonald’s lags the others with a 3% gain in 2026, but remains ahead of the broader market.

Notably absent from the HALO trade are AI stocks and digital companies because AI can sometimes easily replace software. That doesn’t apply as much to companies with sprawling, hard tangible assets.

“Markets are rewarding capacity, networks, infrastructure and engineering complexity — assets that are costly to replicate and less exposed to technological obsolescence,” Goldman Sachs analysts wrote in a widely circulated report last week.

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Tech Companies’ Capex Soars

Goldman analysts outlined the paradox inherent in the AI boom: The industry that invented it is also the one most prone to being obliterated by it.

“The AI revolution questions margins and terminal values in software and IT services, while simultaneously turning some of the most iconic ‘Capital Light’ winners into the largest capital spenders in history,” the report reads.

While not mentioned by name, Goldman appears to refer to megacap tech companies that have recently pumped billions into developing AI, such as Meta Platforms (META), Alphabet (IBD), and Oracle (CRM).

The five AI hyperscalers in the U.S. — Alphabet, Meta and Oracle plus Microsoft and Amazon — have invested $1.5 trillion in capex since the launch of ChatGPT in 2022, according to Goldman Sachs’ estimates. They had only invested $600 billion in their entire history before 2022, the analysts added.

“In 2026 alone, these hyperscalers’ capex is on track to exceed $650 billion, meaning this single year of spending could surpass their total capex invested pre-AI,” the report reads.

The Wall Street consensus is that capital-intensive companies in the HALO trade will have faster EPS growth and higher return on equity than predicted in earlier forecasts, Goldman added.

AI Stocks

Some of the major AI stocks have struggled so far this year. Oracle and Microsoft have had the worst start to the year of the group. Their shares are down more than 20% and 15%, respectively.

Meanwhile, Amazon and Alphabet retreated 6% and 4%. Even Alphabet, which rose about 70% in 2025, lost the momentum it found at the start of the year. In January, the stock broke out of a flat base at a buy point of 328.67. Since then it has fallen about 10%, according to MarketSurge. It first triggered the 7%-8% rule in early February, about a month after its breakout.

Meta’s year-to-date dip of 0.4% is technically beating the market, with the S&P 500 down about 0.5%. However, it is a far cry from Meta’s 86% gain from 2023 to 2025.

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