John Rogers, chairman and co-CEO of Ariel Investments, appeared on CNBC to discuss the current market craze surrounding artificial intelligence [1].

Rogers' perspective is significant as investors navigate a period of high volatility and rapid valuation increases driven by AI technology. His insights provide a counter-narrative to the prevailing optimism found in many tech-heavy portfolios.

Speaking from the floor of the Cboe in Chicago, Rogers addressed the implications of the AI hype for the broader financial landscape [1]. He said the risks associated with the current investment climate compare the trajectory of the AI boom to previous market cycles [2].

Rogers said that the current enthusiasm for AI could follow a pattern similar to the internet bubble of the late 1990s [2]. He noted that while the technology itself may be transformative, the financial markets often overextend valuations before a correction occurs.

During the broadcast, Rogers focused on how investors should approach the market as the rally broadens [3]. He said he has a preference for small-cap names, suggesting that value may be found outside the largest AI-driven stocks [3].

Throughout the discussion, Rogers emphasized the importance of fundamental analysis over trend-following. He said that understanding the underlying business value remains the most reliable way to mitigate risk during a speculative phase [1].

“The AI craze will end the same way the internet bubble did.”

The comparison between the AI boom and the dot-com bubble suggests a warning about asset overvaluation. By pivoting toward small-cap stocks, Rogers is signaling a shift in strategy from growth-at-all-costs toward value investing, reflecting a belief that the most significant gains may now lie in overlooked sectors rather than the primary AI leaders.