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FIGR_HELOC $1.04 Markets · News brief
Tom Lee says AI stock selloff has hit bottom, citing tight supply
The Fundstrat co-founder points to constrained AI capacity and crypto's muted reaction to a Binance breach as signs selling is largely done.
Key takeaways
- Bottom call. Lee said on CNBC's Squawk Box that he thinks the AI selloff is at its bottom, while acknowledging the difficulty of timing lows.
- Supply, not glut. He argued AI demand still outpaces supply, so slowing growth reflects constraints rather than a peak.
- Crypto signal. Lee read crypto's modest reaction to the Binance breach as a sign that many sellers have already left the market.
What happened
Fundstrat co-founder and Bitmine chairman Tom Lee said the recent selloff in AI-related stocks has reached its bottom, pointing to tight supply in the AI market and the crypto market's restrained response to a large exchange breach. He made the remarks in a CNBC interview on Squawk Box, as reported by Decrypt and The Daily Hodl.
Lee framed the call around a distinction between an industry that cannot expand quickly enough and one that has built more capacity than customers need. The AI market, he said, remains very tight rather than oversupplied. Constraints on spending, including political opposition, are slowing growth in his view, but they do not signal that the boom has topped out.
His second argument came from outside equities. Lee pointed to crypto's relatively limited decline after a security breach at Binance, which the exchange initially estimated at about $6.3 billion. In his reading, a market that absorbs bad news without a much larger drop may have fewer sellers left to push prices lower.
Lee also acknowledged the difficulty of identifying a turning point, saying bottoms are dangerous because the remaining downside is unknown. He maintained his forecast that the S&P 500 will finish the year above 8,200, according to The Daily Hodl.
