Goldman Sachs completed a rare strategic turnaround in less than a month—from actively promoting the HALO concept to investors to actively shorting its &#34;overbought&#34; component stocks, reflecting concerns about the crowdedness of heavy asset trading.
On Tuesday, Faris Mourad, head of Goldman Sachs' thematic trading team, launched a short basket GSXUHALT in the latest report, specifically targeting U.S. companies that are asset-intensive but have zero or even negative profit growth expectations, yet their stock prices have surged significantly with the HALO trend. Goldman Sachs believes that the market's enthusiasm for heavy asset stocks has shown indiscriminate characteristics, with the price increases of some individual stocks having become severely disconnected from their fundamentals.
The direct implication of this shift for the market is that the honeymoon period for HALO trading may be over. Goldman Sachs data shows that the GSXUHALT basket began to decline after peaking at the end of February, and the firm recommends that investors pair this short position with thematic long opportunities they favor.
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<h2>A Month Ago: Goldman Sachs Strongly Promoted HALO, Heavy Asset Narrative Swept Wall Street</h2>
Back on February 24, Goldman Sachs' Global Investment Research Department released a report titled &#34;HALO Effect: Heavy Assets and Low Obsolescence in the AI Era,&#34; actively promoting the HALO concept—combining Heavy Assets with Low Obsolescence—alongside major banks like JPMorgan.
The logic at that time was clear and compelling: the rapid rise of AI was creating a dual impact on the light asset industry. On one hand, AI disrupted profit margin expectations in industries such as software and IT services, prompting the market to reassess the terminal value of these sectors; on the other hand, tech giants initiated an unprecedented capital expenditure cycle to maintain their competitive edge in computing power—according to Goldman Sachs data, the five largest tech giants in the U.S. are expected to spend approximately $1.5 trillion on capital expenditures from 2023 to 2026, with spending in 2026 alone expected to exceed $650 billion, surpassing the historical total before the AI era.
Goldman Sachs' data at that time was equally impressive: since 2025, its heavy asset portfolio (GSSTCAPI) has outperformed the light asset portfolio (GSSTCAPL) by 35%. At the macro level, higher real interest rates, geopolitical fragmentation, and supply chain restructuring were seen as collectively forming a structural tailwind for heavy asset stocks.
<h2>Sudden Turnaround: Indiscriminate Market Enthusiasm, Some Heavy Asset Stocks' Gains Have Lost Fundamental Support</h2>
However, just a month later, Goldman Sachs' stance underwent a significant shift.
Mourad pointed out in the latest report that the companies covered by the GSXUHALT basket are those that have risen with the overall heavy asset trend but have no profit growth expectations and whose returns are significantly lagging behind high-quality HALO targets. In other words, as the market chased the &#34;AI insulation&#34; attribute, funds have indiscriminately flowed into all heavy asset stocks without distinguishing between quality
Data confirms this judgment: the increase in the GSXUHALT basket has actually surpassed that of the high-quality, high asset intensity basket (GSTHHAIR), indicating that low-return, no-growth heavy asset stocks have outperformed truly competitive peers. Meanwhile, the price trend of this basket remained in line with earnings expectations until the end of last year, after which a significant divergence occurred.
Goldman Sachs selected the components of GSXUHALT by choosing companies from the Russell 1000 Index in the industries with the highest asset intensity, while excluding all stocks related to long-term trends such as satellites, robotics, quantum computing, and AI, retaining only those stocks that have seen significant increases since the beginning of the year but have flat or downgraded earnings expectations. The average asset intensity ratio of this basket is approximately 1.4.
<h2>Valuation Signal: Heavy Asset Premium is at Historically Above-Median Levels</h2>
Goldman Sachs' research last month pointed out that heavy asset stocks are currently trading at a valuation premium relative to light asset stocks. As of last month, the price-to-earnings ratio premium for heavy asset stocks was about 3%, placing it in the 62nd percentile of the past few decades, although still lower than the historical peaks of 2004, 2012, and 2022, it is no longer cheap.
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Since November last year, Goldman Sachs' industry-neutral heavy asset basket (GSTHHAIR) has outperformed the light asset basket (GSTHLAIR) by approximately 20%. According to Goldman Sachs, the strong performance of heavy assets stems from investors' strong demand for &#34;AI-insulated&#34; assets—those that are not easily disrupted by AI and have underperformed for years in the realm of physical asset stocks.
Goldman Sachs suggests that short positions in GSXUHALT can be paired with thematic long opportunities favored by the bank. The report indicates that the recent market adjustment has created the largest &#34;buying pullback&#34; opportunity in global stock markets since &#34;Liberation Day,&#34; allowing investors to short heavy asset stocks without fundamental support while establishing long exposure in directions supported by long-term trends.
Behind this strategic shift is Goldman Sachs' clear judgment on the internal differentiation of HALO trades: not all heavy asset stocks are worth holding; it is time to distinguish between those with real competitive barriers and upward earnings momentum and those merely hitching a ride on the &#34;heavy asset&#34; label.
Risk Warning and Disclaimer
The market has risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at their own risk

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Goldman Sachs has shifted from actively recommending the HALO concept to shorting some of the stocks that have risen too much within less than a month, reflecting concerns about the congestion of heavy asset trading. Goldman Sachs advises investors to short the GSXUHALT basket, focusing on asset-intensive U.S. companies with zero or negative profit expectations. This shift indicates that the honeymoon period for HALO trading may be over. Goldman Sachs' data shows that the GSXUHALT basket began to decline after peaking at the end of February, suggesting pairing short positions with favorable long opportunities

- Goldman Sachs has shifted its strategy from promoting the HALO concept to shorting overvalued heavy asset stocks, reflecting concerns about market crowding.  
- The firm identifies companies that have risen without profit growth expectations, contrasting them with higher-quality HALO stocks, and suggests pairing these short positions with favorable long opportunities.  
- This strategic pivot indicates a declining appreciation period for HALO trades, as some heavy asset stocks no longer align with fundamental performance.

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In-depth recommendation: HALO has been trading for less than a month, and Goldman Sachs suggests shorting some of the "HALO concept stocks" that have risen too much