John Rogers, founder of Ariel Investments, argues that investors are currently overlooking strong consumer brands that could thrive when the artificial intelligence (AI) hype subsides. He notes that while tech stocks have propelled the market to new heights, particularly with the S&P 500 closing above 7,800, many non-tech companies remain undervalued.
Rogers draws a parallel to the internet bubble burst in 2000, suggesting that a similar inflection point may occur soon. He emphasizes that numerous world-class consumer brands are trading at less than 10 times next year's earnings, a rarity in the last few decades.
Among his top picks are OneSpaWorld, which has seen an 11% increase year-to-date, and Madison Square Garden Entertainment, which has gained approximately 49% this year. Both companies have favorable analyst ratings and significant upside potential. Additionally, J.M. Smucker, known for its popular food products, is also highlighted as a solid investment, with a 20% increase anticipated in 2026.
Rogers believes these businesses will excel in the future, regardless of AI's impact