In brief – Tom Lee told CNBC he thinks the AI stock selloff has reached its bottom, arguing that supply remains tight. – He pointed to crypto’s reaction to the Binance hack as evidence that much of the selling pressure may already have passed. – Strong AI demand has not…
sulated chipmakers from earnings concerns, and Bitcoin fund outflows show investors are still pulling money out. Fundstrat co-founder and Bitmine chairman Tom Lee says the AI stock selloff has reached its bottom, arguing that demand remains constrained by supply and that crypto’s response to a multibillion-dollar hack suggests investors have already done much of their selling. “I think we’re at the bottom,” Lee said in a CNBC interview on Squawk Box
His call follows a decline that has spread beyond individual AI companies: large technology stocks also sit inside the funds many people use to invest for retirement. (Disclosure: Tom Lee is one of several investors in Dastan, Decrypt’s parent company.) Lee acknowledged how difficult it is to identify the point where prices stop falling. “Bottoms are dangerous because you don’t know how much more downside you have at the bottom,” he said. His case rests on a distinction between an industry struggling to expand fast enough and one that has built more capacity than customers need. “The market for AI is still very tight. It’s not an overcapacity market,” Lee said.
Constraints on spending, including political opposition, are slowing growth without signaling that the boom has peaked, he argued. Strong demand still leaves earnings problems The distinction matters for companies building the infrastructure behind AI, including data centers, the facilities that house the computers running these systems. A shortage can leave customers waiting, but it can also prevent suppliers from turning orders into revenue.