Investment in AI-resistant ‘Halo’ companies helps push UK and EU markets to record highs | Stock markets
Investors have a new mantra as they prepare for artificial intelligence to shake up the global economy: Halo trading.
Interest in Halo (heavy assets, low obsolescence) has increased as investors look for companies with tangible, productive assets that can be insulated from AI disruptions, such as energy and transportation infrastructure companies.
Halo trading helped UK and EU stock markets soar to record highs by the end of February as US mega-cap tech companies face a tough start to 2026.
Goldman Sachs reported this week that its basket of more than 100 big-spending companies has outperformed a similar group of capital-light companies by 35% since 2025 as “asset concentration becomes a key driver of valuations and returns.”
“After more than a decade of underinvestment (especially in Europe), companies are turning decisively to physical assets,” Goldman analysts told clients.
Goldman defined Halo businesses as businesses that pair significant physical capital (barriers to replication include cost, regulation, construction time, or engineering complexity) with long-lasting economic relevance. “Examples include grids, pipelines, utilities, transportation infrastructure, critical machinery, and long-cycle industrial capacity,” they said.
They calculated that the valuation gap between capital-intensive and capital-light businesses in Europe has narrowed significantly, with capital-intensive companies now rated higher on a price-to-earnings basis, a key measure of stock performance.
Energy infrastructure companies and oil and gas majors with control over entire supply chains, as well as “you still need this on Monday morning” businesses such as utilities, are examples of Halo companies, said Ruben Dalfovo, an investment strategist at Saxo.
“Waste collection, water utilities and regulated energy networks rarely dominate dinner party conversations. They tend to pop up when investors stop paying for excitement and start paying for reliability,” Dalfovo said.
The FTSE 100, made up of relatively old economy companies, hit a series of record highs in 2026. February was the blue-chip stock index’s strongest month since November 2022, marking its eighth straight monthly gain.
““Investors are moving away from expensive AI and growth stocks to businesses with tangible infrastructure and long-lived assets, such as energy, materials, industrial, transportation and other ‘real world’ businesses,” said İpek Özkardeskaya, a senior analyst at Swissquote.
“In this context, the FTSE 100 is well positioned to benefit from record-to-record Halo inflows, led by energy and mining names,” Özkardeskaya said.
The pan-European Stoxx 600 stock index also hit record highs last week, helped by a shift in U.S. technology stocks to other sectors.
Cyprus-based oil tanker shipping company Frontline is the best-performing member of the Stoxx 600, up 57% so far this year. Norwegian Kongsberg Gruppen, which sells high-tech systems to maritime, aerospace, defense and energy producers, has increased by 46% since the beginning of January.
By contrast, software and data-focused companies have come under pressure in recent weeks as AI companies added services that threaten their revenue models.
Last week, analysts at Citrini Research shook markets with a speculative report outlining a future in which autonomous AI systems disrupt the entire US economy, from jobs to markets to mortgages, driving up unemployment and hammering the stock market.
