Cliff Asness, co-founder of AQR Capital Management, says US equities look historically expensive but not dangerously overvalued, arguing that while prices are high, they fall short of the excesses seen during past bubbles, according to a report by Bloomberg.
Speaking on Bloomberg Television, Asness said the valuation gap between the most and least expensive stocks is now in the 75th to 80th percentile of historical levels — wider than usual, but not extreme. “People are paying a lot for the stocks they like, more than they usually do,” he noted. “That’s typically a good setup for value investors. It hasn’t paid off yet, but we’re not in bubble territory.”
He acknowledged, however, that the cyclically adjusted Shiller P/E ratio for the broader market remains elevated, which “gives me some nerves.”
Asness’s comments come amid ongoing debate over whether surging valuations — fuelled by AI enthusiasm and retail inflows — are sustainable. Traditional value strategies, which seek to profit from mis-pricings between cheap and expensive stocks, have struggled to outperform in the current environment.
AQR’s multi-strategy fund, Apex, has returned 15.6% year-to-date through Q3 2025, driven by gains in equity selection and trend-following strategies.
