If artificial-intelligence spending stalls, investors will be looking for someplace to hide-and the consumer-staples sector might just be the place.

Staples certainly aren't shooting the lights out. Since the bull market started in October 2022, the SPDR Consumer Staples exchange-traded fund has generated a total return of 36%, versus 112% for the State Street SPDR S&P 500 ETF-an embarrassing lag even for a defensive sector.

Problems keep stacking up. Rising energy prices are raising input costs and shrinking customer wallets, leaving the staples with somewhat smaller margins even as profits for the overall S&P 500 skyrocket. Meanwhile, as relatively high-dividend stocks, staples suffer in comparison to bonds when yields rise, which is exactly what they've been doing all year.

If oil prices keep rising, driving inflation higher, crunching consumers, and leading to more Federal Reserve hikes and higher rates, the relative performance for staples won't get any better. What's worse is that if these are the catalysts for a recession or a market correction, staples are unlikely to be the best defensive play, either.

But that's not the only thing that can cause a bear market. This week, we got a small taste of what can happen when investors worry that AI's unstoppable rise suddenly looks stoppable. On Monday, as investors digested the idea that the frontier AI companies might slow their progress in order to prevent an AI apocalypse, the S&P 500 slipped 0.5%, utilities were down 1.3%, the tech sector fell 1.8%-and staples rose 1.3%.

That's not because Americans were stocking up on canned tuna to eat in their bunkers while they waited out the battle of the cyborgs. It's because other defensive sectors, like utilities and even real estate, are much more exposed to the AI data-center buildout, which they're racing to power and house, respectively.

Neil Azous of Rareview Macro says that while staples could enjoy strong relative performance in an AI selloff, they are unlikely to serve as an outright hedge. A better idea, he suggests, is to buy stocks that could directly benefit from an AI slowdown, such as software companies, or simply go to cash.

Still, he says that staples "have been left for dead, and do deserve a look," and points out that if the Iran war winds down, they could benefit from falling energy prices. On the other hand, if inflation does remain stickier, they will probably be relative outperformers because they can maintain pricing power better than discretionary companies.

"Even if inflation keeps up, I still need to buy shampoo, Band-Aids, and alcohol," Azous says.

It's this dynamic that makes consumer staples "a TIPS bond in equity form," says Nick Colas of DataTrek Research, referring to Treasury inflation-protected securities. "It's just the classic risk-off group-and I'd rather have you own them than nothing at all."

They'll look even better if the current pressures let up even a little bit, especially for those with strong brands.

"The market is capitalizing today's pressures as if they are permanent," says Amelia Morris, who oversees the consumer team at Brandes Investment Partners. "So we're looking at companies that might face near-term cyclical and structural challenges, but have very durable franchises."

Among the stocks Morris likes are French liquor company Pernod Ricard and Latin American retailer Wal-Mart de Mexico. But the broader point is that consumer staples could be a good hunting ground for stockpickers.

And if you're worried about an AI slowdown? A staples sector ETF sure beats a can of tuna.