What are the best shares to own in a stock market crash?

The piece argues that while an AI-driven market bubble could trigger broad share-price declines, some well-capitalized companies could emerge stronger by acquiring distressed assets. It highlights Microsoft (NASDAQ:MSFT) — citing its 27% stake in OpenAI, AAA credit rating and strong cash flow — and UK industrial tech acquirer Halma (LSE:HLMA) as examples of firms positioned to buy competitively in a downturn, using Ryanair’s pandemic-era expansion as an illustrative precedent.

Analysis

Winners will be incumbents with low cost-of-capital and spare balance-sheet capacity able to buy distressed assets at discounted multiples; losers are high-multiple, capital-hungry AI plays and smaller cloud vendors facing financing stress. Expect 12–24 month share gains of 2–6% in core cloud/AI revenue for disciplined acquirers who convert optionality into inorganic growth, while pricing power drifts away from fragmented challengers.

Tail risks center on fast-moving regulation (antitrust/AI safety), a credit dislocation that freezes M&A financing, or an AI-model failure that resets investor risk premia; these could produce 20–40% equity drawdowns in affected names. Near-term (days) volatility spikes are likely around earnings and AI announcements; medium-term (3–12 months) is the likeliest M&A window; long-term (1–3 years) will separate acquirers who integrate successfully from those who destroy capital.

Direct trades should express asymmetry: bias long well-capitalized acquirers and short overfinanced AI growth names lacking unit economics. Use options to buy optionality on acquirers on a pullback and sell volatility on speculative AI names; target 3–6 month maturities and scale into moves of 8–15% to control timing risk.

Consensus underestimates integration risk and regulatory pushback — acquiring at a wide premium can dilute long-term ROIC even for big buyers. Historical parallels (post-2008 consolidation) show winners eventually outperform but often after 12–36 months and intermittent 20–35% drawdowns; set stop-loss/hedge triggers to avoid being early and overexposed.

Key Decisions for Investors

• Establish a 2–3% long position in MSFT (NASDAQ:MSFT) over the next 30 days using two tranches (1% now, 1–2% on a pullback >8%). If MSFT falls >12% from today's price, increase to 4–6% (add no more than 2% at that level) and buy 3-month 7% OTM protective puts equal to 0.5% notional to limit drawdown.
• Buy MSFT 6-month calls 5% OTM sized to 50% of desired additional exposure on any intraday drop ≥8% within 60 days; take profits if the calls double or if M&A news lifts the stock >12% intraday.
• Initiate a 1–2% long position in Halma (LSE:HLMA) for 12–36 months as an acquisitive industrial-tech play; add another 1% only after an announced acquisition >£50–100m or positive guidance revision within 180 days, cap total at 3%.
• Implement a relative-value pair: long MSFT 3% and short GOOG/GOOGL 2% to express capital-allocation advantage; unwind the pair if GOOG outperforms MSFT by >8% over any 60-day window or if a new major regulatory filing (DOJ/FTC) appears within 90 days.
• Construct a 1% short exposure (equal-weight) to a basket of ~10 small-cap AI/Gen-AI names with negative EBITDA and >50% Y/Y revenue growth; size to 1% portfolio and sell monthly covered calls on any short that rallies >15% to monetize elevated volatility.