AI Anxiety Is Tanking Stocks. Here’s the HALO

I can see your halo, halo, halo.

Beyonce fan or not, a new trend may be taking over Wall Street with an investing approach that favors stocks with significant real-world assets and low chances of becoming obsolete. The Heavy Asset, Low Obsolescence strategy played out in the markets in recent weeks as investors piled into companies with hard assets, like refineries, airliners or data-centers, and ones that are much less likely to be displaced by large language models. Look no further than the prices of Charles Schwab, LPL, Raymond James and other brokerages that tanked earlier this week after news of a new AI tax tool shook investor confidence. That same anxiety is pushing money out of enterprise software companies and into businesses viewed as harder to disrupt, and it could become a dominant investment theme this year.

“This is the simplest idea in the world,” said Ritholtz Wealth CEO Josh Brown, who coined the term in a blog post over the weekend. “[Allocators] don’t want to go to sleep at night, wondering if they’re going to wake up the next day and Perplexity just took the f****** business.”

Getting Heavy

For investors, 2026 may be the year that AI disruption really shakes up the markets. Unfortunately, these new HALO stocks are sometimes hard to pin down (but not quite as hard as obsolescence is to pronounce). Not only do they span sectors, but there’s not a traditional framework to classify them. Examples include energy giants like Exxon, retailers like Walmart, fast-food chains such as McDonald’s and Starbucks, industrial and materials companies like Caterpillar, and consumer staples like Hershey. What unites them is dependence on physical goods, infrastructure or services.

“No matter what Anthropic disrupts next, it can’t make a can of soda,” Brown told Advisor Upside. “It can’t build a crane. It can’t build natural gas lines that took 50 years to build and [faced] licensing and regulatory hurdles.” There are some interesting ETFs tracking broad market segments that are illustrating the trend:

• The most popular energy fund, XLE, is up 23% year to date. There are other funds from State Street Investment Management that track materials and consumer staples, namely XLB and XLP, that are up 18% and 14%, respectively.
• Compare that with iShare’s Expanded Tech-Software Sector (IGV) that has shed 22% of its value this year as of Wednesday. 

Rob Thummel, a senior portfolio manager at Tortoise Capital, said he wasn’t familiar with the HALO acronym but the US runs the largest energy pipeline network in the world, and almost all the operators are publicly traded with high free cash flows, high dividend yields, and solid balance sheets. “Said in a different way, there is no economy without energy. We study all new, emerging energy technologies and we don’t see anything on the horizon that will materially alter the US energy supply,” he said.

Coin It. The market is already re-weighting multiples as investments have been pouring out of enterprise software companies, Brown said. “We might have called these old-economy stocks, but I think the correct terminology is investors now want to own companies that have heavy assets and low obsolescence risk,” he said. “That’s HALO.”