Capital-Intensive Stocks Gain as Tech Giants Invest Heavily in AI

Goldman Sachs analysts recently pointed out that capital-intensive stocks are outperforming their capital-light counterparts by nearly 35% since the beginning of 2025. This trend is attributed to investors flocking towards stocks with 'HALO effect,' or companies with heavy assets and low obsolescence. The firm stated that markets are rewarding capacity, networks, infrastructure, and engineering complexity, assets that are costly to replicate and less exposed to technological obsolescence.

The analysts also highlighted the significant investment by big tech companies in AI infrastructure. According to Goldman, Amazon, Oracle, Microsoft, and Meta Platforms are on track to spend $1.5 trillion on AI infrastructure between 2023 and 2026, which is a substantial increase from their total investment of around $600 billion throughout their entire history until 2022.

Earnings momentum also favors capital-intensive stocks, with consensus earnings estimates now higher for these companies than for capital-light firms. This trend is evident in the performance of tech stocks like Microsoft and Amazon, which have struggled after reporting their latest quarterly results.