"A Real Weapon AI Can't Imitate"...Goldman Sachs Reveals Investment Strategy That Achieved 20% Performance This Year

▲ U.S. stock market, stock investment, bull market/AI-generated image

As artificial intelligence shakes up the corporate competitive landscape, Wall Street money is flocking to factories, power grids, and defense industry assets that cannot be easily replicated. Analysis suggests that the HALO investment strategy, which has risen by approximately 20% this year, has now entered its second phase, where real winners are determined by performance.

According to MarketWatch on July 7 (local time), Goldman Sachs evaluated that the HALO investment strategy has entered a new phase after achieving strong performance. HALO is a strategy that invests in companies with large-scale physical assets and low obsolescence risk. A business structure that is difficult for artificial intelligence technology to easily replace is key.

Josh Brown, CEO of Ritholtz Wealth Management, introduced the investment concept of HALO earlier this year. Goldman Sachs strategist Guillaume Jaisson stated that the HALO strategy, consisting of buying capital-intensive companies and selling capital-light companies, has risen by approximately 20% this year. Capital-intensive companies have surpassed pre-war levels after enduring the initial selling shock during the Iran war.

However, the diagnosis is that the stage where stock prices rise simply due to valuation revaluation is coming to an end. Jaisson said, "As capital-intensive companies have significantly outperformed capital-light companies, the valuation gap has largely narrowed." He added, "In the future, returns will increasingly depend on performance."

Goldman Sachs focused on physical asset-based areas in infrastructure, basic materials, aerospace & defense, manufacturing & consumer platforms, and technology industries. For infrastructure, Enel and E.ON were suggested; for basic materials, Shell (SHEL) and BP. Airbus, Rheinmetall, Volvo, and BMW were also mentioned as HALO investment targets. In the technology sector, ASML Holding (ASML) and ASM International were suggested.

Goldman Sachs expressed greater confidence in increased investment surrounding energy security and industrial sovereignty. It evaluated that investor funds are still largely disengaged from value stocks, meaning they are not adequately prepared for a market where the strategic importance of physical assets, infrastructure, and industrial production capacity is growing. In the next phase of the HALO strategy, companies that demonstrate not only high entry barriers but also actual profit growth are expected to distinguish the winners.

[Article Key Summary]

-Goldman Sachs announced that its HALO investment strategy, focused on capital-intensive companies, has risen by approximately 20% this year.

-The HALO strategy focuses on companies with physical assets that are difficult for AI to easily replace and high entry barriers.

-Goldman Sachs predicts that in the next upward phase, actual corporate performance, rather than valuation, will determine stock prices.

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