HALO'd Out: Goldman Goes Short One Of Wall Street's Favorite Trades https://t.co/izHLMprTcu
Source: Axios
Research Brief
What our analysis found
The HALO trade — standing for Heavy Assets, Low Obsolescence — has become one of Wall Street's hottest themes in early 2026, as investors rotate out of software and capital-light tech into asset-heavy sectors like utilities, energy, transport infrastructure, and basic resources. Goldman Sachs helped codify the trend in a February 24, 2026 research note titled "Strategy Matters: The HALO Effect," authored by Guillaume Jaisson, Peter Oppenheimer, and colleagues. The note introduced two custom baskets — Capital Intensive (GSSTCAPI) versus Capital Light (GSSTCAPL) — and documented that capital-intensive stocks had outperformed capital-light names by roughly 35% since 2025, fueled in part by hyperscaler capital expenditures projected at approximately $650 billion in 2026 alone and a cumulative $1.5 trillion from 2023 to 2026.
The backdrop has been dramatic: the S&P Software Index fell approximately 20% in February 2026 amid fears of AI-driven disruption, while the S&P Global Mining Index surged more than 100% year-over-year. Goldman's prime brokerage data showed that the week of January 30 to February 5, 2026 saw record notional single-stock short selling in data going back to 2016, with short sales running roughly 2-to-1 versus long buys. Separately, Goldman launched an "S&P ex-AI" custom index (ticker SPXXAI), noting that AI-linked names now represent roughly 45% of the S&P 500 and that the ex-AI portion returned just 32% versus the full index's 76% over three years.
A tweet claiming Goldman has now gone short the HALO trade generated significant attention, but the underlying article appears to originate from an aggregator or opinion-driven outlet rather than a direct Goldman client note. DWS, Morningstar, and multiple financial media outlets have all flagged the HALO rotation as one of the heaviest sector shifts in years, with dividend-rich HALO sectors — energy, materials, and industrials — leading early-2026 performance. Whether Goldman has actually reversed its stance, however, requires careful scrutiny.
Fact Check
Evidence from both sides
Supporting Evidence
Goldman launched adjacent short-oriented products
: In mid-February 2026, Goldman's US custom baskets team created a software pairs-trade basket that goes long AI-resilient software names and short those most vulnerable to AI automation, according to FA Magazine. While not a direct "short HALO" call, it demonstrates Goldman actively constructing short-side positioning around AI disruption themes.
Record short-selling activity in Goldman prime brokerage data
: Goldman's own flow data showed that the week of January 30 to February 5, 2026 saw record notional single-stock short selling going back to 2016, with shorts outpacing longs roughly 2-to-1, as reported by TheStreet. This confirms a broad environment of aggressive short positioning among Goldman's hedge fund clients.
Headline may reflect editorial interpretation of a shift in tone
: Goldman's creation of both the HALO baskets and the S&P ex-AI index (SPXXAI) signals the firm is actively helping clients position around a potential reversal in the HALO trade, which could be interpreted by aggregator outlets as Goldman preparing for a short scenario even if not explicitly recommending one.
Contradicting Evidence
Goldman's own HALO research is explicitly constructive, not bearish
: The February 24, 2026 "Strategy Matters" note documents 35% outperformance of capital-intensive over capital-light stocks since 2025, argues for continued macro tailwinds, and introduces pro-HALO baskets (GSSTCAPI). No language in the available research calls for shorting HALO sectors, according to the full PDF hosted by Etica News.
No primary Goldman source recommending a "short HALO" trade has been found
: Through March 18, 2026, no Goldman client note, strategy piece, or official communication explicitly recommends shorting HALO or capital-intensive sectors as a theme. The linked article headline appears to come from an opinionated or aggregator outlet rather than a Goldman publication.
Goldman's pairs trade is within software, not against HALO
: The long/short software basket Goldman launched goes long AI-resilient software and short AI-vulnerable software — both sides are capital-light technology names, not a bet against the heavy-asset HALO sectors that the tweet implies, as confirmed by FA Magazine's reporting.
Goldman noted that long-term allocations to HALO remain light
: The firm's own research observed that while flows favor HALO, institutional long-term allocations to these sectors are still underweight, suggesting Goldman sees further room for the trade to run rather than a reason to short it.
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