The HALO Effect: Hard Assets Hold Their Ground
April 30, 2026
Artificial intelligence (AI) is reshaping how work gets done, enabling tasks that once required hours to be completed in minutes. The question is not only how can we benefit from AI, but also which jobs, industries and companies may be disintermediated or displaced along the way. Financial markets are beginning to reflect this shift, as companies perceived as less vulnerable to AI-driven disruption have caught a bid. These businesses are being labeled “HALO” companies, short for heavy assets, low obsolescence.1
The logic behind this trend is straightforward. Companies that rely on meaningful physical assets or produce tangible goods, such as retailers, energy firms and chemical companies, are inherently more difficult for AI to displace. They provide essential outputs that remain necessary regardless of how the work is done. Even as technology advances, core needs like energy and utilities do not disappear. Investors increasingly believe these businesses will remain relevant even as automation and AI tools reshape other sectors.
Recent technological developments, including tools capable of automating research or professional services, triggered sharp selloffs in the technology and financial sectors. In contrast, HALO-classified companies, such as retailers, energy firms and chemical companies, have experienced the most spread tightening year to date.
Key Takeaway
The HALO effect is real. Investors are rotating away from AI-driven hype toward “real-world” companies with durable assets, betting that physical, hard-to-disrupt businesses will prove more resilient in the near term. The market appears to be shifting into a more selective phase, increasingly focused on which business models can sustain value amid rapid technological change.
Sources:
1The Wall Street Journal – Wall Street’s Latest Bet Is on ‘HALO’ Companies With AI Immunity; 2/22/26
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