Investors looking for gains in this volatile market should pick and choose their spots in artificial intelligence while also adding exposure to names unlikely to be disrupted by the new technology, according to investor Dan Niles. “You want to have a mix between asset-heavy names [and] be well diversified,” the founder of Niles Investment Management said Monday in a CNBC ” Squawk on the Street ” interview. “The AI trade … with OpenClaw having come out, that’s a good area still and I think you’re hitting another inflection point in token demand.” “What you’re going to see is, as more people start to deploy things that are actually useful, that’s eventually going to lead to these AI trades, or at least my favorite ones, starting to work again,” he added. “That’s why you want to have this barbel of ‘HALO’ names and AI names.” HALO refers to “heavy asset, low obsolescence” stocks, which are seen as less vulnerable to AI disruption. Niles also said the overall stock market is oversold. That makes this “a good time to consider putting some cash to work.” The S & P 500 posted on Friday its fourth losing week in a row as the U.S.-Iran war continued. Stocks rallied on Monday, however, after President Donald Trump said the two countries had “productive” talks over the weekend. On the AI front, Niles recommends investors have exposure to stocks that will likely benefit from “a massive uptick in agentic AI.” Alphabet is one name that is poised to gain ground on the AI trade this year, Niles said, pointing to the company’s robust resources and technology stack. To be sure, the stock has fallen more than 3% this year as the AI trade appears to lose steam. However, “as more and more people start to deploy things that are actually useful, that’s eventually going to lead to these AI trades, or at least my favorite ones, starting to work again,” Niles said. GOOGL YTD mountain GOOGL year to date For HALO exposure, Niles said he likes stocks in the utilities, materials, energy, staples and industrials sectors. “Not everybody’s going to win” in AI, Niles said. “You need to be very selective when you go through this, and that includes owning some of the names in the heavy asset, low obsolescence category.” And while software stocks may be rallying along with the rest of the market, Niles said it’s best to steer clear of those names. “On a longer-term basis, you are going to get a lot of software companies getting absolutely wiped out,” particularly if those firms don’t own the underlying data, Niles said. “You got to figure out who the winners are going to be.”
What hedge fund manager Dan Niles is doing during this market turnaround
Mar 23, 2026
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