HALO stocks: Buying what AI can't replace becomes a hot theme in 2026

One of the market’s most talked-about themes in 2026 is the shift into so‑called HALO stocks: companies whose economic value is anchored in tangible, long‑lived assets and are perceived as less vulnerable to displacement by artificial intelligence. The narrative has already prompted ETF filings that target HALO criteria, most notably a Form N‑1A registration for the Defiance US AI Resilience ETF and prospectuses from index and ETF providers defining HALO eligibility.

HALO—commonly framed as “Heavy Asset, Low Obsolescence”—was popularized in market commentary and televised market shows early in the year, driving investor interest in sectors such as energy, utilities, transportation and industrials. Prominent market commentators and research desks have outlined simple screens for HALO eligibility: physical asset intensity, generational infrastructure or brands, and low dependence on software‑driven optionality. Index providers have translated these principles into multi‑factor rules for inclusion and weighting.

Institutional research notes and market strategists point to a broader re‑pricing where asset intensity has become a driver of returns; Goldman Sachs and other firms have highlighted that capital is rotating toward companies with physical moats as investors price in AI disruption risk. That rotation has been visible in regional market flows and sector performance, with resources and infrastructure markets attracting shelter flows in several exchanges.

The market impact has been nuanced: while some HALO names have outperformed amid AI‑related volatility, the trade is not a blanket defensive shield. Physical‑asset companies remain exposed to cyclical demand, commodity swings, regulatory constraints and capital expenditure cycles. ETF and index prospectuses explicitly warn that HALO scoring frameworks and constituent mixes vary, so products labeled HALO can differ materially in sector exposure and risk profile.

Looking ahead, analysts expect continued investor interest in HALO strategies as long as AI uncertainty persists and valuation debates over software versus asset‑heavy business models continue. ETF filings now on record will determine how quickly tradable HALO products appear on exchanges; until then, investors can use sector and single‑name exposures to express the theme, while monitoring index methodologies, fees and concentration risks when considering dedicated HALO funds.