Goldman Sachs has identified a strategic shift in investment focus towards HALO stocks, which are characterized by heavy assets and low obsolescence. Analysts noted that the current economic environment, marked by higher real yields and geopolitical tensions, has led to a renewed emphasis on companies with tangible productive assets.
This trend is particularly relevant as many traditionally 'Capital Light' firms are now investing heavily in capital expenditures (capex) to develop advanced technologies, especially in AI. Goldman Sachs predicts that key sectors such as data centers, semiconductors, utilities, and defense will account for over 40% of global capital expenditure this year.
The firm recommends investing in companies across five main themes: infrastructure, basic materials, aerospace and defense, manufacturing and consumer platforms, and the physical layer of technology. Specific buy-rated stocks include Enel, BP, Airbus, and ASML, among others.
The analysts emphasize that while the short-term positioning may be challenging, the long-term outlook remains positive for investors who align with this HALO framework. They also highlight that this trend is not limited to Europe but is a global phenomenon, with similar investment strategies emerging in the US, Asia-Pacific, and other regions