During the first week of March, traditional growth investors still focused on AI industry chain opportunities and resource sector bulls who had shifted attention to whether the Strait of Hormuz was blocked discovered their convergence point: the HALO concept.

This terminology originates from a Goldman Sachs report published on February 24, 2026, advocating for HALO assets. HALO stands for Heavy Assets with Low Obsolescence, with its core investment thesis summarizable as: in an era where AI rapidly disrupts the digital world, capital is paying premiums for physical assets in the real world that cannot be replaced or disrupted by AI.

More plainly, classic, long-established assets including power grids, pipeline networks, utilities, transportation infrastructure, high-end heavy equipment, and long-cycle industrial capacity are experiencing their own renaissance.

Although Goldman Sachs' starting point was AI, not geopolitics, renewed conflict in the Middle East disrupting global oil shipping and driving up international oil and gas prices has further validated the report's thesis.

Simultaneously, on the evening of March 2, Anthropic's AI assistant Claude experienced a major service outage. The primary reasons cited were demand surges overwhelming infrastructure capacity and suspected attacks causing fire and power failures at an AWS data center in the Middle East, once again highlighting the paramount importance of continuous supply and stable production capacity in the physical world.

On a micro level, AI can instantly analyze millions of financial reports but still cannot perform household chores like tidying a messy room. On a macro level, no matter how advanced silicon-based brains become, they seem unable to prevent carbon-based lifeforms from creating chaos in the real world and disrupting global supply chains.

Within the narrative economics of the market, AI has successively highlighted various industrial bottlenecks, from computing power constraints to electricity supply issues, gradually pulling previously overlooked "heavy assets" and "manufacturing" back to center stage.

The world has changed. Post-2020, global instability has challenged many seemingly classic investment strategies. Whether barbell strategies, 60/40 stock/bond allocations, or all-weather portfolios, each faced brutal stress tests during extreme black swan events—the 2020 pandemic, the 2022 Russia-Ukraine conflict, and 2025's comprehensive tariffs—making investment risks unavoidable.

By 2026, rapid AI advancement significantly increased capital expenditure, while regional conflicts led to global supply crises, directly challenging the most classic stock-picking strategy of the past decade: favoring light-asset models and avoiding heavy-asset companies.

This preference for certain equity characteristics stemmed from the post-2008 financial crisis era. During the mobile internet period, Wall Street, dancing with low interest rates and ample liquidity, elevated SaaS into a perennial wealth code for US stocks.

Concepts like light assets, high margins, zero marginal cost, and infinite network effects spread rapidly, gaining many adherents among fund managers in markets like China.

For instance, Zhang Kun, a prominent mutual fund manager known for focusing on long-term ROE and business models, explicitly stated his preference: "Globally, there are very few heavy-asset companies with market caps over $100 billion. Things that can be solved with money are not ultimately important. The worst aspect of heavy assets is that they are solvable with money, making differentiation difficult. Light assets are easier to differentiate."

However, over the past three months, global market preferences have subtly shifted. Goldman Sachs' research on HALO assets, using European markets as a sample, found that light-asset portfolios, which previously enjoyed valuation premiums, are undergoing valuation corrections, while long-suppressed heavy-asset portfolios are seeing sustained multiple expansion, with the valuation gap between the two narrowing sharply in recent years.

Concurrently, a strategy team led by Mou Yiling, Chief Strategist at Jinmao Securities Research Institute, demonstrated in a March 1st report that a portfolio of previously underweighted "heavy assets" within the Russell 3000 Index has significantly outperformed light-asset portfolios since late 2025.

The "style shift" occurring in Wall Street and global capital markets fundamentally reflects a change in capital flows. Viewing the market as an ecosystem, the ongoing AI capital expenditure race since 2024 represents a massive, unprecedented capital transfer from light-asset tech giants to heavy-asset traditional industries, far exceeding telecom infrastructure spending during the dot-com bubble and comparable to 19th-century US railroad construction.

Based on recent financial guidance and analyst projections, five tech giants—Amazon, Alphabet, Meta, Microsoft, and Oracle—are poised to direct nearly $700 billion in cash flow or debt financing towards AI infrastructure in 2026 alone.

In a previously anticipated interest rate cutting cycle, such massive capital expenditure was viewed positively, supporting Nvidia's rise and boosting stocks like Samsung and SK Hynix. However, Middle East conflicts reignited inflation fears, soaring resource prices, and paralyzed shipping logistics are testing the "leveraged investment in AI infrastructure" thesis amid great uncertainty over the Strait of Hormuz's closure, threatening to turn perfect leverage into financial risk. South Korean markets reacted sharply, recording a historic single-day drop.

Amid widespread uncertainty about future developments and capital flows into oil for hedging, Mou Yiling's report contends that "global investors may find the HALO assets they seek, immune to disruption, are widely distributed within Chinese markets."

Productivity equals wealth. During last April's global tariff storm, a prominent私募 fund manager's comments about the US being the sole "rule-maker" sparked controversy. At that time, Mou Yiling argued that the global consensus of the US being the primary end-demand source would be broken.

Soon after, he left his previous firm and reappeared in late June 2025 as Chief Strategist at Jinmao Securities, publishing a significant report advocating for a shift from the virtual to the real economy and deeply analyzing the "re-rating of Chinese manufacturing" and "physical assets."

Mou's core logic is that US-led globalization was an era of "financial capital expansion," where financial assets commanded high premiums. However, amid tariff storms and deglobalization, valuation drivers are shifting from liquidity and US dollar credit to the supply-demand stability of the real economy.

In a world of restructuring order and supply chain decoupling, true scarcity lies not in dollar capital but in productive physical assets. China, as the world's largest manufacturer of physical assets, possesses massive capacity, skilled labor, and infrastructure that should be viewed not as cheap "contracting" but as core hard assets.

Addressing concerns about tariffs and supply chain relocation, Mou highlights the extremely high cost of rebuilding manufacturing capacity. Any country attempting to recreate a complete local supply chain would consume vast upstream resources, energy, and time.

This implies that global supply chain restructuring will not immediately destroy China's manufacturing advantage but will, in the short-to-medium term, significantly boost demand for Chinese upstream materials and equipment makers, making its capacity irreplaceable. The characteristics of Chinese manufacturing—heavy assets, high barriers, long cycles, and full ecosystems—epitomize the HALO concept.

Crucially, the fundamental physical constraint for manufacturing and expanding any physical asset is energy. Driven by deglobalization and AI computing demands, global energy needs are rigid. The power sector and upstream traditional energy are the core bottleneck links in the physical asset value chain. China's exceptionally well-developed and low-cost power infrastructure, long undervalued, deserves re-assessment.

With intensified global conflicts, Mou reiterates that "physical assets forgotten during periods of orderly prosperity will gain systemic importance. Simultaneously, Chinese assets possess the strongest physical attributes globally, and their re-rating during turbulence deserves attention."

Examining institutional investor positioning, within the broad "physical assets" category, the most significant increase in domestic allocations has been to upstream resources, particularly non-ferrous metals. Among the top ten stocks most increased by mutual funds in 2025, three were from the non-ferrous sector. Overall, non-ferrous metals were the number one sector for mutual fund allocation increases by end-2025.

Conversely, following the Middle East conflict, the surging oil and gas sector had long been underweighted, "strategically ignored" by mainstream active equity funds. Despite high-dividend appeal, these stocks lacked growth elasticity and pricing power, unlike other physical asset sub-sectors, and did not see broad fund buying. Expanding discounts for the H-shares of China's three major oil companies suggest institutions are not the primary buyers in the recent oil and gas rally.

The re-rating of physical assets is underpinned by a new grand narrative. For decades, the golden age of globalization fostered the "Just-in-Time" supply chain mantra, where multinationals compressed every link for maximum capital efficiency and zero inventory. After successive shocks—pandemic disruptions, tariff barriers, and geopolitical conflicts—the new imperative for global giants is "Just-in-Case," prioritizing raw material and local capacity reserves even at the cost of some capital efficiency.

This fundamental shift in supply chain philosophy resonates with the changes individual investors face. Ultimately, it boils down to one word: uncertainty. Whether driven by AI FOMO or the physical HALO concept, in such an uncertain world, when the path is unclear, maintaining some reserves and keeping ammunition dry is a prudent choice compared to perpetual full investment.