Goldman Sachs Team: Heavy Asset Stocks Outperform Amid Concerns Over AI Disruption

According to Goldman Sachs strategists, stocks of companies with tangible production assets have performed better as investors seek safe havens to avoid the risk of industry disruption brought by artificial intelligence.

The Goldman Sachs team pointed out that since the beginning of 2025, the heavy asset/capital-intensive stock portfolio (companies whose economic value comes from physical assets) they compiled has outperformed the light asset portfolio (companies relying on human or digital capital) by about 35%.

Strategists including Guillaume Jaisson said in a client report that investors are increasingly buying stocks with the so-called "HALO effect" (heavy assets and low risk of obsolescence), mainly concentrated in sectors such as utilities, basic resources, and energy.

The team’s selected capital-intensive European stocks include: ASML, Safran, LVMH, Air Liquide, Airbus, and others; the light asset portfolio includes L'Oréal, Adyen, DSV, Siemens Healthineers, and others.

Jaisson wrote: "The market is rewarding capacity, networks, infrastructure, and engineering complexity — assets with high replication costs and less affected by technological obsolescence."

The panic over AI applications disrupting existing business models has swept across various industries from software to asset management, causing previously considered "sure-win" stocks to plunge. This panic has triggered indiscriminate selling, even spreading to industries like logistics, which on the surface are less threatened by AI.

The strategists stated that the race for AI leadership has also transformed previous light-asset leaders (the five major cloud service providers) into capital-intensive enterprises.

According to their estimates, Amazon, Microsoft, Alphabet, Meta, and Oracle will invest about $1.5 trillion in building AI infrastructure between 2023 and 2026; before 2022, the total historical investment of these companies was only about $600 billion.

The Goldman Sachs team stated that rising real yields, geopolitical factors driving fiscal spending, and manufacturing expansion are all supporting capital flows into capital-intensive sectors. Earnings momentum is also starting to favor such companies: consensus market expectations show that heavy asset companies now have higher per-share earnings growth and return on net assets than light asset companies.

Morgan Stanley strategists also pointed out that capital is moving away from light asset industries such as software. In a report on Monday, they wrote that European pure long funds have begun to reduce holdings of stocks facing AI disruption risks by the end of 2025.

Editor: Guo Mingyu