When a hurricane looms, panic buying clears store shelves of household essentials like water, canned food, dry goods, and toilet paper. A similar dynamic is playing out in the market. Investors are bailing on higher-volatility growth stocks and running toward the shelter of perceived safety sectors like utilities and consumer staples. The key difference? They may not be so safe.

As valuation multiples across capital-intensive AI infrastructure plays — such as specialized data center hosting providers CoreWeave (CRWV) and Iren Ltd (IREN) — take on water in the form of massive debt loads due to aggressive capex buildouts, investors may want to take a portion of their equity exposure into more protected water. The issue with utilities is that while it is traditionally considered a conservative sector, more recently it has become part of the AI story as the massive data center build-out is accompanied by surging power demand. This is one of the reasons that in recent years utilities outperformed staples.…