Defensive Stampede Risks Turning Safe Stocks Into The Next Bubble

(MENAFN- Investor Ideas) newswire) a trusted platform for investing ideas including AI and robotics stocks issues market commentary from deVere Group.

A record rush into defensive stocks risks turning "safe" stocks into the next bubble, warns the CEO of deVere Group, one of the world's largest independent financial advisory organisations.

The comments from Nigel Green come as global consumer staples stocks post their best month since 1998, soaring 10.6% in October, while global healthcare jumps 9.8%, its second biggest monthly gain this century.

Over the same stretch, global tech shares have tumbled around 13% from their early October peak.

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Consumer staples now trade on around 23.8 times forward earnings, their richest level since 1998 and up from below 21 times a year ago.

Large US tech stocks, by contrast, trade on roughly 23 times expected 2026 profits, with the wider market near 21. Some of the biggest supermarket names sit above 40 times forward earnings, while the leading AI chipmaker trades nearer 13.

The deVere CEO points to the speed of the shift as a warning sign. On 9 November, Wall Street's benchmark index posted its biggest one-day gain since April, rising 2.35%. Technology stocks climbed 3.73% while staples managed just 0.90%.

Meanwhile, the AI spending boom shows little sign of slowing. The largest technology groups are forecast to spend between $803 billion and $828 billion on capital expenditure in 2026, with third quarter outlays alone up about 20% on the previous quarter.

Europe offers a reminder of what a different market make up can deliver. The region's main share index is up about 1.5% in November, while the tech-heavy US benchmark is down more than 2%.

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