Fundstrat's Tom Lee Calls AI Capex Fear a Bullish Signal This Week

According to Tom Lee, head of research at Fundstrat Global Advisors, the market's fear over artificial intelligence capex is actually a bullish sign this week, not a warning of an approaching market top. Lee argues that widespread skepticism about the AI trade's durability indicates the cycle still has room to run, as investors rarely question a narrative's longevity right before it peaks. "The fact that many people are saying that is a sign that we're not at a top because people are questioning the longevity of the cycle," Lee said on CNBC.

This view contrasts with Steve Eisman's warning this week that markets could fall sharply if hyperscalers cut AI spending, which he attributed to Nvidia's exposure to such investment. Meanwhile, the Federal Reserve begins a two-day meeting on July 28, with traders currently pricing roughly a one-in-three chance of a rate hike, up from 16% a week earlier. Lee expects the Fed to rely on quantitative tightening instead.