Fundstrat’s Tom Lee: Tech & AI Momentum Far From Over Post-NVDA

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01. Big tech getting bigger as the NASDAQ pops to yet another record high. Welcome to Power Lunch, everybody. I am Brian Sullivan. Kelly is off today. Nvidia may not be rocking after earnings, but call them the AAA's. Apple, Amazon, Alphabet, they're all higher. And Tom Lee says you can hate this rally all you want, but you're going to miss out on making some money.

02. He is here on set in a moment. Plus, why one company might make you money in the big power buildout, and it's probably not a name that you're thinking of. The big brand your kid may be telling you not to buy. And would you buy a tiny little electric pickup truck if it only cost 25,000 bucks? Well, it's coming and we're going to show it to you coming up in just a couple minutes.

03. But let us start with maybe the most bullish man in America, Tom Lee of Funstrat. He's not only been bullish, but maybe he's also been the most correct man in America. His optimistic take has played out not just with stocks, but with Bitcoin and crypto as well. So, I'm going to shut up because Tom Lee is here on set.

04. Tom, thank you for coming on. Really appreciate it. Yeah, great to see you, Brian. I know a lot of people want your take on Nvidia and we'll get all that stuff. How has it been in like in April you remain bullish even when everybody was running around with their hair on fire? Is it hard like do you get do people come at you and be like how could you be so bullish all the time Tom Lee?

05. Uh yeah I think that we get more criticism than positive feedback to any of our views. I mean if someone follows us on social media like Twitter or if you look at the comments on our YouTube clips or even sometimes unrequested inbound emails to our firm usually it's criticism. Yeah. It's amazing what people can do with when it's anonymous, right?

06. And they write in whatever. But that those people, you've been right. I mean, you've been bullish. You've stayed long. You've stayed strong. What are you seeing maybe that some others are missing? I don't know. Uh well, I think too many people are are tied to their own biases. So like when markets were falling in February to April, then in their own portfolios, they were suffering damage.

07. And as you know, that gets into people's sort of psychology because no one likes to lose money. It's more painful to lose a dollar than to gain than the joy of gaining a dollar. But what we did was we took a step back and said, you know, with all the forces at work, are we really going to drive the economy off a cliff?

08. And if the answer was no, then we know that at those points of fear, that's when as hard as it is to to do is you either have to hold on or buy. And that was our advice to clients. Yeah. And is there anything that you see in your research Tom that would imply that this momentum trade if it is indeed a momentum trade is going to end anytime soon?

09. Uh we don't we we you know for instance if we take AI as a thought uh and we let's say overlay something like the exponential growth of the wireless industry that was a 20-year period when the number of users went from 37 million subscribers to 7 billion. uh you know we don't have seven billion chat GBT users and we don't have seven billion robots.

10. So I think if someone not yet that's right and so if someone's trying to ring the bell at the top for AI they're underestimating how quickly penetration grows we're probably in the first quarter or first third of that cycle for AI. Okay, if I had to make if I had to take the other side of that trade and who am I?

11. But we'll talk about this by the way with Christina parts and coming up soon is that people are spending a lot of money on AI, the metas of the world, the XAIs, the Google's, they're buying a bunch of NVIDIA chips, they're building out power data centers, and all that's inflating the market. Are companies making any money from AI?

12. They're spending a lot, but are they making any? Um, that's a great question. And because if they're not, maybe they stop spending so much. Well, um, I I think that when you look at the early builds of any new wave, and I think wireless is a good example, first is the infrastructure that gets laid. So that's the LLMs and the the data centers and then what happens is you have critical mass and so then the application layer starts to emerge.

13. That's exactly what happened with wireless. And then that's when not until 2007 that the iPhone came along. 15 years into that cycle. So I I was thinking more like Global Crossingish. Yes. Right. Somebody paid and if and if you're if you're really young, Global Crossing was a company that spent billions and billions and billions of dollars laying actual physical cable around the oceans of the world to which eventually Global Crossing went bankrupt.

14. But those cables are still being used today. Thank god. Yeah. all that fiber. They spent that money to do that even though it sort of cost them the corporate entity. There's you're not seeing any of that now. That's right. And in the global caring case, the second owner of the hotel made a lot of money.

15. Yeah. Second. So, I think that we're now at the phase where we're going to be thinking about things of like security around AI, you know, proof of human or whatever. And we're going to see companies leverage AI like the JP Morgans and the Goldman. So there's another wave of opportunity coming where is it's exactly where what you're saying.

16. We got to the point where AI is good enough that companies can really now actually improve their business strategy. So I think there's still a lot of positive to come. Yeah. And I I hate to say it because you never want to talk about job losses but I think that companies we have a story later on in the show.

17. Companies may be able to use AI to shall we say they'll say rightize I don't like that term but streamline expenses. Let's move on. Break.