Artificial intelligence-related stocks are currently trading at rich valuations after more than a year of investor excitement around the trend. But while fundamental factors around these names are supportive of their multiples, the market isn't in the all-clear zone, according to Charles Schwab chief investment strategist Liz Ann Sonders. "AI and its enthusiasm — I think that's very legitimate," Sonders told CNBC's " Squawk on the Street " on Monday.
The S & P 500 hit a fresh record on Monday, brining its year-to-date gain to more than 14%. The bulk of those gains comes from major tech companies tied to AI such as Nvidia — which has more than tripled in 2024. .SPX YTD mountain To be sure, Sonders noted the significant lack of market breadth and weakness under the surface. "The market has done quite well, but most stocks have not. That kind of divergence and concentration could go on for a while.