The AI trade has been straightforward. Follow the demand, follow the chips, follow the cloud.
Investors have piled into Nvidia Corporation
But BlackRock, Inc
The firm argued in an April 30 note that "equity markets are growing more selective around AI exposure this year" with investors beginning to differentiate between companies that benefit from AI and those that could be disrupted by it.
From Chips To 'HALO' Stocks
That shift is giving rise to a less obvious theme: HALO.
Short for 'Heavy Assets, Low Obsolescence', HALO refers to businesses built on physical infrastructure that is difficult to digitize away. BlackRock describes these as companies with "capital-intensive physical infrastructure that is difficult or impossible to digitize," where AI is more likely to enhance efficiency than replace the core business.
In plain terms: not everything gets disrupted. Some things get optimized.
Why Paint Is Suddenly Part Of The AI Story
That's where PPG Industries, Inc
BlackRock points to the company as a case study of how AI is being used outside traditional tech. "We are already seeing live examples of companies in these areas leveraging AI to create new revenue-generating ideas and enhance the efficiency of their physical assets," the firm writes.
One example: PPG built a database of its products and their chemical properties. Using AI, it developed a fast-drying automotive clear coat.
The model didn't just speed up testing-it suggested a new combination of chemicals not previously used, effectively creating a new product.
That product is real. PPG introduced its Deltron D8178 Rapid Low Energy clearcoat in March, saying it can dry in as little as five minutes at 50°C, or become dust-free in 15 minutes at room temperature-reducing time and energy use versus traditional processes.
A Broader AI Shift Investors May Be Missing
This isn't a call to replace Nvidia with paint stocks.
It's a reminder that AI's impact may be broader-and quieter-than the current trade suggests.
Industry groups like the National Association of Manufacturers have highlighted similar trends, noting AI is already being used in manufacturing for tasks such as speeding up paint drying and improving industrial design processes..
BlackRock's takeaway is measured but telling: given rising volatility tied to AI disruption, investors may want to apply a more active lens and consider value and infrastructure plays as diversification.
Because while everyone is watching Nvidia...
AI may already be reshaping industries that don't look like AI at all.
