Ariel Investments co-CEO and chief investment officer John Rogers sees a possible opening for overlooked consumer brands and leisure companies if enthusiasm for AI-related stocks fades. He named J.M. Smucker, OneSpaWorld, Sphere and Madison Square Garden Entertainment, noting that many consumer stocks trade at less than 10 times next year's expected earnings.
The view comes as AI-linked shares continue to lift the broader U.S. market. The S&P 500 closed above 7,800 for the first time on Tuesday, with semiconductor stocks among the main drivers. Rogers compared today's market concentration in technology stocks with the period around the bursting of the dot-com bubble in 2000, arguing that some non-tech companies have been left behind on valuation.
Rogers looks to the rotation after the dot-com bust
Since late 2022, investment has flowed steadily into AI-related technology stocks. Expectations for AI-driven earnings have also helped the Dow Jones Industrial Average and the S&P 500 set records on August 4. Many companies outside the technology sector, however, have lagged the broader market.
Rogers said that after the internet bubble burst in 2000, smaller, less-followed companies outperformed the market for several years. In his view, the valuation discounts on some consumer brands are among the steepest he has seen in 20 to 30 years. He attributes that gap to investor preference for high-profile stocks, which has left traditional consumer businesses with less attention.
Smucker's six-month gain has nearly matched Nvidia's
J.M. Smucker is one of the companies Rogers highlighted. Its shares rose nearly 26% over the past six months, close to Nvidia's roughly 28% gain over the same period. The comparison shows that Smucker has posted a notable advance despite not being an AI-themed stock, but one stretch of performance does not establish that consumer shares are broadly beginning to outperform technology stocks.
Rogers' broader point is that investors may want to pay attention to companies with lower valuations and business models distinct from those of large technology firms. If the AI trade pulls back, whether capital rotates into these overlooked sectors will depend on earnings, valuations and wider market conditions—not simply on their relative cheapness today.
Four picks span consumer goods, cruise services and entertainment
Alongside Smucker, Rogers cited OneSpaWorld, Sphere and Madison Square Garden Entertainment. OneSpaWorld operates spa services aboard cruise ships, and its shares are up about 11% so far this year. Its business has a different growth profile from semiconductors and AI infrastructure, and can also be affected by cruise operations and consumer spending.
The available information does not provide specific valuation figures or business forecasts from Rogers for Sphere or Madison Square Garden Entertainment, so it does not establish that he holds the same view on each company. His central argument is about the valuation gap between sectors: as AI-related assets attract strong investor interest, traditional consumer and entertainment businesses may be priced more cautiously.