Barclays Names Top Consumer Staples Picks to Ride Market Volatility By Investing.com

The subtle winner here is not just the defensive consumer basket, but the AI infrastructure ecosystem being pulled into the same capital-allocation gravity well. A $25bn-scale commitment from a hyperscaler to an AI model provider reinforces that frontier-model training remains a multi-year capex arms race, which should keep demand tight for compute, networking, power, and advanced packaging even if headline AI software monetization stays noisy. That makes the most durable second-order trade the picks-and-shovels layer, while the model layer itself becomes more of a financing and execution story than a pure sentiment trade.

Within staples, the market is likely underestimating how much relative alpha comes from balance-sheet flexibility versus top-line growth. In a slower-growth, sticky-inflation regime, brands with pricing power can defend gross margin, but the real separation comes from who can reinvest while others protect leverage targets; that favors the more globally diversified cash generators and penalizes names with higher FX, mix, or regulatory drag. British American Tobacco is especially interesting because its next-gen optionality is still underwritten by a very resilient legacy cash engine, creating a path for multiple expansion if category momentum proves durable over the next 2-3 quarters.

The contrarian view is that the current move may be too consensual in the defensive bucket and too timid in the AI supply chain. Staples outperformance tends to fade once growth data stabilizes, so these are better viewed as 3-6 month relative-value holdings than long-duration compounders at any price. Conversely, the market may be underpricing how much incremental AI capex can ripple into industrials and semis over the next 12-18 months, especially if one large customer’s willingness to pre-commit forces competitors to match spending to avoid strategic underinvestment.