Goldman Sachs analysts revealed that markets are increasingly favoring heavy asset, low obsolescence (HALO) firms, citing their resilience amid evolving economic pressures. Sectors like grids, pipelines, utilities, transport infrastructure, and critical machinery were highlighted as prime examples of HALO businesses. These capital-intensive industries have outperformed their capital-light counterparts by 35% since 2025, signaling a notable shift in investor sentiment.

The analysts attributed this trend to higher real yields, geopolitical fragmentation, and global supply chain disruptions. They noted that asset intensity—driven by the need for tangible, long-term economic relevance—has become a critical valuation driver. Meanwhile, AI advancements are squeezing margins for mega-cap tech firms and disrupting software and IT services, sectors previously reliant on scalability over physical assets.

Energy systems, supply chains, and infrastructure are now viewed as strategic and scarce resources, with markets pricing their value more aggressively. Analysts emphasized that these assets are costly to replicate and less vulnerable to technological disruption, making them attractive in an era of economic uncertainty.

The valuation gap between capital-intensive and capital-light businesses has narrowed significantly, reflecting a broader reassessment of risk and reward. As geopolitical tensions and structural globalization shifts reshape priorities, investors are flocking to industries with enduring physical footprints and engineering complexity.