MarketsJul 9, 2026
The HALO Trade Finds Its Footing Beyond Valuation Gains
Market Rotation
Rhea Lobo
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The AI boom built a world that runs on servers, but Goldman Sachs says the biggest winners own the infrastructure beneath them. The rotation from asset-light software to capital-intensive businesses has become one of 2026's defining market trades, and Goldman says it's entering a more consequential phase.
Halo effect: The HALO framework, short for "Heavy Assets, Low Obsolescence," focuses on companies that own scarce physical assets with high barriers to entry and limited risk of technological disruption. Goldman analyst Guillaume Jaisson believes the easy gains are likely behind investors, arguing that "the next leg of performance does not require further multiple expansion, or even significant upgrades. It simply requires delivery."
Goldman says the HALO trade is entering a more durable phase, where earnings growth rather than valuation re-rating will increasingly drive returns. The bank expects a wider gap between winners and losers as capital spending continues to concentrate in key sectors. Data centers, semiconductors, utilities, and defense are projected to account for more than 40% of global capex in 2026, up from 25% in 2022.
Global rotation: Goldman says the HALO trade has become global, with baskets spanning the US, Asia-Pacific, Japan, and emerging markets. It sees the greatest upside in Europe, Japan, and parts of emerging markets, where equity markets have greater exposure to capital-intensive sectors than the tech-heavy US. The bank also says investors remain underweight value stocks, suggesting many portfolios are still under-positioned for a world where physical infrastructure commands a premium.
