AI-related stocks are currently trading at high valuations due to strong investor excitement. Charles Schwab's Liz Ann Sonders believes that while the market is favorable towards AI companies, there are still risks to be aware of. Unlike the dot-com bubble, the current AI rally is supported by factors such as free cash flow and profitability streams. The S&P 500 hit a new record, largely driven by tech companies like Nvidia. However, Sonders warns of market breadth weaknesses and advises investors to rebalance their portfolios to manage concentration risks. She also points out disparities in consumer spending data, indicating broader economic pressures. Ultimately, while the AI trend is promising, investors should remain cautious and diversify their portfolios to navigate potential market uncertainties.