Artificial intelligence is losing its stock. More investors are opting to put their money into industries that are less likely to be affected by the technology and selling off shares of companies that are more likely to be impacted by AI. While this may not become a long-term investment choice, it points to skepticism about whether artificial intelligence truly benefits the economy.
What’s HALO trading? “HALO” stands for “heavy assets, low obsolescence.” This means investing in businesses “less vulnerable to being supplanted by AI,” including companies operating “pipelines, utilities, transportation infrastructure, factories and ports,” said Bloomberg. These are companies that “you cannot type something in a prompt and disrupt,” Josh Brown, the chief executive at Ritholtz Wealth Management who coined the term, said to The Wall Street Journal.
HALO trading also goes hand-in-hand with AI scare trading, defined as selling “all things AI-linked,” said Bloomberg. AI scare trading has “been on a bender this year, steamrolling entire industries based on the flimsiest of evidence that the technology is coming for them,” said Axios. HALO trading, on the other hand, is a more recent occurrence and is “why many real-world sectors are outperforming this year, even as the overall market and especially tech stocks have floundered,” said CNBC.
What’s the future of investing? HALO trading may be a temporary trend or “another iteration of the jitters that have periodically rippled through markets since the AI investing boom began,” said the Journal. Still, there are some recent signs that it has been decreasing. Tech shares have already “regained some ground this past week, with the Nasdaq besting the Dow industrials,” and stock values went up “after the news that the U.S. Supreme Court had struck down” President Donald Trump’s global tariffs.
“We are in a new chapter, and I think that chapter is going to be defined by companies proving” their longevity, Jed Ellerbroek, a portfolio manager at Argent Capital Management, said to the Journal. “Hype isn’t cutting it anymore.” |