Goldman Sachs Highlights Shift to Capital-Intensive Stocks

(Bloomberg) — According to strategists at Goldman Sachs Group Inc., stocks belonging to companies with substantial manufacturing assets are doing better as investors seek refuge from the disruptions brought on by artificial intelligence.

The Goldman team reported that a selection of capital-heavy stocks, which derive their economic value from tangible assets, has outperformed a lighter group focused on human and digital resources by approximately 35% since the beginning of 2025.

In a client note, Guillaume Jesson and his team observed that more investors are leaning towards sectors like utilities, basic resources, and energy. This trend is being referred to as the “HALO effect,” where there’s a preference for more substantial assets with reduced vulnerability to becoming obsolete.

Included in their selection of European capital-heavy stocks are ASML Holding NV, Safran SA, LVMH, Air Liquide SA, and Airbus SE. Meanwhile, the Capital Lite basket features companies like L’Oréal SA, Adyen NV, DSV AS, and Siemens Healthineers AG.

Jason pointed out, “The market rewards capacity, network, infrastructure, and engineering complexity—attributes that are expensive to duplicate and less susceptible to technological obsolescence.”

Concerns are growing that AI developments could fundamentally disrupt business models across various sectors, from software to wealth management. This has led to a decline in stocks that were previously considered reliable investments, with the effects even trickling down to industries like logistics that might not seem at immediate risk from AI.

Strategists have noted that the race for AI dominance has transformed even those companies traditionally successful in capital-light markets—like the five major hyperscalers—into capital-intensive enterprises.

They predict that these major players—Amazon.com Inc., Microsoft Corp., Alphabet Inc., Meta Platforms Inc., and Oracle Corp.—will spend around $1.5 trillion developing AI infrastructure between 2023 and 2026. This is notably higher than the roughly $600 billion these companies have invested throughout their entire history up to 2022.

Goldman’s team mentioned that rising real yields and geopolitical factors, which are prompting increases in government spending and manufacturing, are fueling the movement toward capital-intensive sectors. They also highlighted a shift in earnings momentum, with consensus expectations for earnings per share growth and return on equity now favoring capital-intensive companies over their lighter counterparts.