As the rapid advancement of artificial intelligence continues to reshape the corporate landscape, a growing number of investors are pivoting toward the ‘HALO’ investment thesis. Coined by Ritholtz Wealth Management CEO Josh Brown, the acronym stands for ‘heavy assets, low obsolescence.’ This strategy focuses on identifying companies that rely on physical infrastructure and tangible operations, making them inherently more resistant to the disruptive potential of software-based AI models.

While high-growth enterprise software companies like Adobe, ServiceNow, and Salesforce have faced significant market pressure and volatility, HALO-aligned stocks have demonstrated remarkable resilience. Major players such as FedEx, ExxonMobil, and Coca-Cola have seen substantial year-to-date gains, signaling a shift in sentiment as market participants seek safety in businesses that provide essential services—such as energy production, logistics, and physical manufacturing—that cannot be digitized or replaced by large language models.

To capitalize on this trend, Roundhill Investments recently launched the LOHA ETF, which specifically tracks large-cap U.S. companies anchored in critical infrastructure and physical assets. According to Roundhill CEO Dave Mazza, the fund is designed for businesses that are not only durable but are likely to benefit from AI integration rather than suffer from its displacement. Holdings in the new fund include established industrial and transportation giants like Cummins, AutoZone, and CSX, many of which boast century-long track records of stability.

Proponents of the HALO trade emphasize that this is not a bet against the growth of artificial intelligence, but rather a strategic reallocation toward companies that are AI-resistant. By prioritizing firms that require physical labor and real-world assets to generate revenue, investors are looking to mitigate the risks associated with companies whose business models may be rendered obsolete by automation. This trend underscores a broader reassessment of value in the market as investors differentiate between companies that can be disrupted by algorithms and those that remain essential to the functioning of the global economy.