Fundstrat chief investment officer Tom Lee says the market sell-off triggered by the release of low-cost Chinese artificial intelligence (AI) model DeepSeek is an overreaction.
In a new interview on CNBC’s “Closing Bell,” Lee says that Monday’s market correction is likely an opportunity for long-term investors.
Stocks and crypto plummeted on Monday as investors processed DeepSeek’s implications, including for AI chipmaker Nvidia (NVDA), one of the hardest hit stocks.
“Markets don’t like uncertainty. They like visibility. They like moats. So markets are a little scared [Monday]. To me, it’s an overreaction. The Nvidia decline is the worst since March 2020, and we know that that ended up being a huge opportunity for investors. It’s not a fun day, but I’d be looking at this as an opportunity…
This is the nature of technology. I’d be personally surprised if Nvidia became Betamax in the past week. I mean that really would be the kind of change that would be required to really justify selling Nvidia here. Given the need for AI because of global labor shortage and Nvidia chip dominance is still strong, unless a new model emerges that doesn’t require GPUs (graphics processing units) entirely, I’d say that markets just generally do buyer-ready aim.”
Lee also says that he is bullish on the financial sector overall in 2025.
“Financials, to me, represent a pretty good fundamental case of change this year, because we have a new administration, a Fed that is dovish, yields that aren’t painful for banks, and at a time when it could lead to upside for capital markets activity and multiples are low. So I think financials remain our number one S&P sector idea.”
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