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So, Tom Lee just went live on CNBC and said that we are close to the bottom of this AI stock sell-off, and now could be one of the best buying opportunities in 2026. I think we are in the final stages of this sale. I think there are many opportunities ahead. I see this as a compressed spring of strength as fundamentals remain stable.
And the main reason he sees this sell-off as one of the best buying opportunities in 2026 is that it is driven by fear, not the fundamentals of AI development. That's why he believes that when this fear disappears, all these stocks will skyrocket. And when asked, are you willing to buy during the sale?
He replied that yes, he was ready to buy. And when he was asked, what sector are you going to invest in? He said he was ready to buy stocks in the fields of AI, chips, semiconductors, cryptocurrency, and memory. Would you buy during the sale? Yes. If you say yes, I would buy, then where exactly would you buy?
Memory companies, Nvidia and Magnetic Seven—they're selling off because it's easy to play the short side right now, and I think people are certainly concerned about the credit aspect. I think they're bottoming out, but I also like the software, and I also like the cryptocurrency here. Well, he has good reason to expect this recovery, because the reason is fear.
But we also need to look at the fundamentals of AI. Is there still a demand for AI, or are people slowing down in buying these AI chips? This is one of the main reasons why people started to fear AI and why this sell-off started. And that's why if you buy too early, another drop can hurt your portfolio.
And if you wait for perfect news, you may miss the market recovery. So in this episode, I'm going to take a closer look at AI fundamentals and see if demand for AI chips remains consistently high. And I will also find out if this is one of the best buying opportunities, based on numbers and math. And then I'll tell you what I did during this sale.
The best way to gauge whether demand for AI, the fundamental foundation of the industry, remains strong is to look at the companies that make these chips. Are they continuing sales? Are their profits increasing? So let's look at two giants, including TSMC, which produces chips and occupies 72.5% of the global foundry market by revenue.
It is the largest player in the production of AI chips. Next, it is worth paying attention to ASML, which manufactures equipment for the production of these chips. These companies are at the beginning of the production chain of AI chips . This means that if customers expect demand for these chips to weaken, they may reduce their orders, and this will hit them first.
So, these companies will be the first to suffer as soon as demand for AI chips falls, because they are the manufacturers. Such a slowdown could be a signal to the rest of the industry, i.e. the rest of the Mag 7 companies and AI companies like Nvidia, etc. That's why their sales and orders help understand whether demand remains high and whether this pullback is caused by investor excitement or fear .
So, let's look at TSMC. In the September quarter, TSMC's revenue reached about $46.7 billion , up 41.2% from a year earlier. Revenue is forecast to grow again next quarter, which is really good news. And if you look at ASML, sales in the last quarter increased by about 25% compared to the previous one, which is also very good.
Management expects customer demand to exceed current supply plans in 2027 and 2028, which is very beneficial for chip manufacturers. So, the numbers show that these AI chips are still being sold, and the demand remains very high. Furthermore, management forecasts that these sales will grow in the coming quarters and years.
This confirms Tom Lee's words that the demand for AI remains high and the fundamentals are strong. So the situation looks optimistic right now: demand for AI is strong, and the sell-off is driven by fear—so buy when there is fear, and that's how you can make a fortune. However, there is one thing we missed.
The whole story changed when Meta released its earnings report last week. On October 21, Meta announced something that alarmed all investors. The company generated about $32.8 billion in operating cash flow during the quarter. However, its capital expenditures, including equipment and AI infrastructure, reached $34.9 billion .
This means it spent $2.1 billion more than it earned, resulting in negative free cash flow. These costs apply to the entire company, so we can't just call it AI costs. They cover everything, but they show how expensive this investment cycle has become, and that is what has scared all investors and triggered the sell-off.
Meta still has significant cash reserves. This means she can use them. The concern is how long this level of spending will last and how much money these investments will ultimately bring in, i.e. what the payback will be. These concerns fueled a sell-off in shares, causing Meta to fall about 7% the next day.
If these companies continue to report negative free cash flow, investors will start putting more pressure on them to control costs . And that's when giants like Meta or Google may reconsider the amounts they are willing to invest in AI. And that's when AI development will slow down. For now, they have cash reserves to support these costs, which ensures orders flow through the chain from Nvidia to TSMC and ASML.
But this margin of safety is not eternal. If costs continue to exceed revenues and pressure mounts, they may postpone projects or cut back on new orders. That's when the slowdown could reach chipmakers. So yes, Tom Lee's argument that the demand for AI is still strong may be correct today, but I fear that a slowdown is yet to come.
And that's why I say there will be a pushback in 2027, a significant pushback, and that's when these giants will start to limit their spending on AI. And once that happens, once we see at least some news about AI spending caps, we will start to see a sharper sell-off across the industry. We will see a "red" market.
And I believe this will happen in mid-2027, because this entire chain: manufacturers of AI chips, equipment for their production, as well as developers like Nvidia, AMD and all the other companies, TSMC, ASML — they all get money from the “big seven.” Once the G7 slows down or limits spending on AI, all of these companies will come under pressure.
And that's when the massive sale will begin. We just got a taste of what's in store for us in 2027. So yes, this sale is a good buying opportunity. I agree with Tom Lee, but are we close to the “bottom” as Tom Lee says? Well, I disagree with him because no one can tell you where or when the "bottom" will be.
We may be close to the "bottom," but no one can guarantee that. The market could fall even lower. Even Warren Buffett said that no one can predict the stock market, its "bottom" or "peak." So, what should we do? I will share with you what I did personally. As recently as March 24, Microsoft shares fell about 30% from their all-time high.
I saw an opportunity, so I bought Microsoft using the cost averaging method during this downturn. 3 days ago I sold these stocks for a 42% profit in just 7 months. This is a result that I am very pleased with. Just 3 days ago I noticed that Google had fallen about 90% from its all-time high during a sell-off.
I saw a good opportunity to buy on the dip, so I bought Google at $323 per share. My goal is to make a profit of 50% or more within the next 6 months. This is just my expectation, but there is no guarantee that it will happen. Or that it will happen so quickly. I don't know. If this happens, the 42% return from Microsoft and the subsequent 50% from Google will give me almost a doubling of my investment this year.
To achieve that in a year is extraordinary, it's better than the S&P 500, and that's how I've been beating the S &P 500 for the last few years. But I am not a financial advisor and I do not encourage anyone to copy my trades. I'm just sharing what I do with my money. For my part, I always recommend using cost averaging during sales.
Continue to buy every week. Then, when the " compression spring" that Tom Lee talked about, or the rapid growth, occurs again, you will be in the black. Also, keep buying on the dips, and when the market starts to recover , you will make a fortune. This is what I do: I saw a very good opportunity in Google due to a big drop, bought the shares and hope that in 4-5 months I will get 40-50 %, as was the case with my success this year.
I got 42% in just 7 months, which is a truly great result. If you enjoyed this video, please like and subscribe as I will be covering all the macroeconomic events in the stock market and pointing out the best times to buy, like the one I just shared. And I'm not a financial advisor, but this is what I did: I bought stocks because I believe they will all go back to their all-time highs and everyone will make money, including you, me, and everyone else.
Everyone will be happy. I am covering all these trading windows and believe that 2027 will also provide very good opportunities for shopping and making big money. Follow and join us on this journey.
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