- Tom Lee from Fundstrat told CNBC’s “Squawk Box” that technology, especially AI, remains crucial despite Nvidia’s recent weakness, predicting a market leadership shift toward broader tech, financials, and mid/small-caps once current turbulence from tariffs and DOGE austerity subsides.
- He addressed Bitcoin’s drop from $105,000 as a cyclical downturn, yet remains bullish, forecasting it will surpass $150,000 this year, driven by increasing acceptance.
- Lee’s outlook ties market resilience to sector rotation and Bitcoin’s volatility, where gains occur in just 10 days, suggesting investors must endure short-term roughness for long-term upside amid Fed and policy influences.
Tom Lee, Fundstrat co-founder, managing partner, and Fundstrat Capital CIO, appeared on CNBC’s “Squawk Box” to share his insights on market trends, emphasizing that technology, particularly the AI trade, remains pivotal despite recent skepticism around Nvidia’s (NVDA) failure to recover its pre-Deepseek gap. He argued that AI spending will persist, supported by prodigious gains over the past two years, though investors have already priced in significant positive expectations, ranking technology third in Fundstrat’s sector weightings behind financials and industrials. Lee anticipates that once the current market turbulence subsides, leadership will shift toward a broader tech base beyond the Mag 7, alongside financials, mid-caps, and small-caps, mirroring the rotation observed in the first five weeks of January.
Addressing Bitcoin (BTC), Lee noted its recent drop below $80,000 – from a high of $105,000 to a projected $62,000 by late March, as predicted by Fundstrat technician Mark Newton – attributing it to a cyclical downturn rather than negative headlines in February. He highlighted Bitcoin’s volatile nature, where all gains typically concentrate in just 10 days, suggesting that attempts to time the market could miss a rebound to its highs, and maintained a bullish outlook, forecasting it will exceed $150K this year due to growing acceptance, potentially amplified if firms like Citadel begin trading it. Lee’s perspective ties into broader market dynamics, where tariff threats and DOGE’s cost-cutting measures under the Trump administration create uncertainty, yet he sees resilience in equities, driven by rotations and selective strength rather than a reliance on past winners like the Mag 7.
The discussion also touched on the Federal Reserve’s inflation fight, implicitly shaping market expectations, though Lee focused on sector shifts and Bitcoin’s trajectory rather than monetary policy specifics. His confidence in a market bottoming process hinges on weathering current choppiness – exacerbated by tariff uncertainties and austerity measures – while anticipating a jobs report could influence Fed actions, indirectly supporting his bullish Bitcoin and equity views. With financials and industrials leading, and Bitcoin poised for a significant rally, Lee’s outlook blends technical analysis with macroeconomic trends, positioning technology and cryptocurrencies as enduring forces in a shifting market landscape.
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