The valuation of capital-intensive firms has risen significantly, with a narrowing gap in ratings compared to capital-light companies in Europe. This shift is reflective of a broader trend as investors increasingly favor tangible assets amidst concerns over the impact of artificial intelligence on various sectors. By February 2026, stock markets in the UK and EU reached record highs, largely driven by this new investment strategy known as the “Halo trade.”
Goldman Sachs reported that its selection of over 100 heavy asset companies has outperformed similar lighter firms by 35% since 2025. This trend highlights a renewed focus on sectors such as energy and transport infrastructure, where companies with substantial physical capital are gaining traction. Analysts emphasize the significance of barriers to replication in defining these Halo businesses, which include utilities and long-cycle industrial capacities.
Investment strategist Ruben Dalfovo from Saxo pointed out that energy infrastructure and oil and gas companies are prime examples of this movement towards asset-intensive investments. Essential services like waste collection and water services are also gaining attention, as they are perceived as more reliable compared to high-risk, high-reward growth stocks. The FTSE 100, reflecting this trend, has seen a strong performance, marking February as its best month since November 2022.