The term "HALO" has become popular! An overview of related concepts

Recently, AI has popularized a new term: “HALO.”

HALO is an abbreviation for “Heavy Assets, Low Obsolescence,” a concept now widely adopted by Wall Street investment banks such as Morgan Stanley and Goldman Sachs.

The most straightforward reason for this concept’s emergence is likely “AI fear.” Against the backdrop of the accelerating AI revolution, lightweight assets (such as software and media) become easier to copy, leading the market to start revaluing tangible assets like power grids, pipelines, and infrastructure—assets that are difficult to replicate.

Two days ago, Goldman Sachs’ Global Investment Research Department released a new report titled “HALO Influence: Heavy Assets and Low Obsolescence in the AI Field,” which states: Under the combined effects of higher real interest rates, geopolitical fragmentation, supply chain restructuring, and the wave of AI capital expenditure, the core valuation logic of the stock market is shifting from “scalable light asset narratives” to “buildable, hard-to-replace physical capacity and networks.”

Morgan Stanley’s trading division believes that the market panic over AI disrupting the traditional software industry may have peaked. For investors still worried about ongoing AI impacts, tangible assets with high entry barriers and difficult to be replaced by technology (i.e., “HALO” assets) currently represent the best hedging strategy.

Based on this logic, Morgan Stanley has constructed a HALO basket (MSXXHALO), covering seven structural pillars: materials, utilities, railways, pipelines, waste management, defense, and signal towers.

Data shows that over the past year, Morgan Stanley’s HALO basket has increased by 28%, while the basket of stocks affected by AI disruption has fallen by 43%.

Similarly, in the A-share market, the industries corresponding to these seven structural pillars have also performed well since 2025. According to Eastmoney Choice data, from 2025 to now, the fiberglass sector has risen 243%, non-ferrous metals 132%, semiconductor materials 73%, environmental protection 39%, and communication equipment 124%. However, some sectors performed poorly, such as railway transportation down 17% and railway equipment down 7%.