AI equities are described as remaining in good shape despite concerns about AI capital expenditure, with expectations of a later rebound in AI-linked stocks.
Tom Lee, Fundstrat Global Advisors' head of research, said the AI trade is still in very good shape despite questions about its durability.
Lee argued that market worries about corporate AI capital spending can be read as a positive signal, calling the notion that AI capex fear is actually the bullish tell.
He described the recent sector pullback as a rolling correction and said the move was a normal repricing rather than a sign the cycle has ended.
Lee also noted the trade is shifting within markets, pointing to pockets of rotation such as Ethereum outperforming memory-equipment benchmarks, with Ethereum beating the Roundhill Memory ETF by 72% in relative terms this month.
His remarks came during a CNBC segment that paired the AI discussion with commentary on the Federal Reserve and the inflation outlook.
Lee said the selloff had not altered his core view and that he still expected AI-linked stocks to recover later in the year.
