AI Fears Drive Investors to "HALO" Stocks: Heavy Assets Outperform Tech

This strategy favors companies with significant physical assets and a low risk of becoming obsolete, such as energy giants, retailers, fast-food chains, and industrial companies. The trend is highlighted by the underperformance of tech-related ETFs like iShares' Expanded Tech-Software Sector (IGV), which has shed 22% year-to-date, compared to strong gains in energy (XLE, up 23%), materials (XLB, up 18%), and consumer staples (XLP, up 14%) ETFs.

Experts note that companies reliant on physical goods and infrastructure, like those in the energy sector, are less susceptible to disruption by AI technologies. This shift is causing a re-evaluation of market multiples, moving away from enterprise software and towards these more tangible businesses.