Tom Lee of Fundstrat Global Advisors acknowledged uncertainty around the AI trade but remains optimistic that things could turn for the better in March.
Sharing his insights on CNBC’s ‘Closing Bell’ on Saturday, Lee called the market “angst” against AI in February “overly pessimistic” and said, “I think investors are losing sight of the bigger picture, which is that when it comes to the global implications of AI.”
He suggested that the U.S. and potentially China could be the main creators and beneficiaries of AI, indicating that the S&P 500 could benefit.
The analyst also discussed Nvidia Corp.‘s (NASDAQ:NVDA) week, which was disappointing despite a strong earnings report. He expressed disappointment at the stock’s performance but predicted a consolidation and rerating period for the company’s price.
NVIDIA’s stock declined 7.41% over the past 5 days.
On the topic of credit and the widening spreads, Lee acknowledged that private credit has been a problem for some time. He suggested that the Federal Reserve needs to reconsider its interest rate policy in light of these issues.
Despite the market nervousness, Lee remains optimistic about the future. He believes that March will be a “turnaround month” for the market and that the economy is not slowing down. He suggested that any growth scare is more about “risk premium” than actual economic concerns.
Lee’s Rally Call Vs Scaramucci’s Warnings
Earlier this year, Lee forecasted a significant rise in the S&P 500, projecting the index to reach 7700 by the end of 2026, with a possible 15-20% correction in the latter half of the year. In February, he also defended high equity prices and suggested that the market deserves to re-rate higher, pushing back against warnings that this is the most expensive market ever.
While Lee is optimistic about the market turnaround in March, the recent strength of precious metals, particularly gold, which has outperformed the S&P 500 Index for seven consecutive months, might be a signal of upcoming market changes.
SkyBridge Capital founder Anthony Scaramucci warned that markets face bigger risks from weakening capital flows, calling the pullback a “capital boycott” as global investors reallocate funds. He cited what he described as Warren Buffett moving $400 billion out of the market as a warning sign, even though data show sovereign wealth funds and public pensions invested about $132 billion into the U.S. in 2025, roughly half of global allocations.
Meanwhile, Dow futures fell 428 points (0.87%) Sunday evening, while S&P 500 and Nasdaq futures dropped more than 1%, as markets reacted sharply to high-intensity U.S. and Israeli strikes on Iranian military targets under “Operation Epic Fury.”
Price Action: Over the past month, SPDR S&P 500 ETF Trust (NYSE:SPY), which tracks the S&P 500 and Invesco QQQ Trust (NASDAQ:VOO), which tracks NASDAQ, fell 1.35% and 3.01%, respectively.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Miha Creative / Shutterstock
Recent Comments