AI stock pickers grapple with the feeling of dot-com deja vu

Investors seeking to capitalize on artificial intelligence are harkening back to another period when a technological advancement caused a market frenzy: the dot-com era.

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Stocks are far from the mania that developed around internet-based businesses in the 1990s when the Nasdaq 100 soared more than 800% in five years. But surges in tech shares are posing similar challenges: how to pick winners and losers based on a nascent technology with vast potential that has yet to alter the economic landscape.

The similarities are undeniable for Michael O'Rourke, chief market strategist at Jones trading. While he says it's still early in the investing cycle, O'Rourke is keeping a close eye on valuations, where fear of missing out can quickly send stocks into fantasy territory.