Tom Lee argues the market can still grind higher despite 2026 turbulence, because AI is lifting U.S. earnings, the U.S. has energy advantages, and capital is rotating from private alternatives into public equities. He also keeps a constructive long-run view on crypto, saying Bitcoin and Ethereum remain structurally intact even if sentiment is poor and crypto has lagged software and equities.
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Tom Lee’s core message is that the market setup remains broadly bullish even though he expects choppier conditions into late 2026. He says he anticipated turbulence this year, but still sees durable tailwinds for U.S. stocks from AI-driven earnings growth, U.S. energy resilience, and capital rotation into public markets. His framework is that earnings can scale meaningfully, and at a market multiple that translates into substantial index upside. He grounds that view in a simple arithmetic argument: if S&P 500 earnings for the year are roughly $40, and the market applies a 20x multiple, that implies about 800 points of upside. He also argues that AI benefits are not confined to a few names, but are increasingly flowing downstream to American businesses more broadly. In his view, U.S. …
Tactically, Lee thinks the market can still grind higher, but the next several months may be messy enough to punish complacent positioning. The near-term risk is a seasonal/Fed/IPO digestion phase that could look worse than it is.
Over the next few months, the higher-probability path is a choppy consolidation followed by a stronger advance into the autumn if earnings and AI breadth stay intact. That view weakens if inflation/Fed surprises or capital-market supply overwhelm demand.
Lee’s long-run regime call is that AI and tokenization expand U.S. economic and market leadership, lifting both equities and selected crypto assets. The structural implication is a higher earnings and innovation backdrop, with public markets capturing more of the upside.
Tom Lee says he expected 2026 to be a turbulent year with head fakes, but still sees strong tailwinds for U.S. stocks.
He explicitly frames 2026 as volatile while remaining broadly bullish.
He argues AI, U.S. energy independence, and downstream AI adoption are supporting S&P earnings.
He links multiple structural tailwinds to earnings growth.
He thinks first-quarter S&P earnings came in $10 higher, which implies about $40 for the year and 800 S&P points at a 20x multiple.
This is his explicit earnings-to-index arithmetic.
What did you say about the next 2 or 2.5 years being some of the best market activity we've ever seen? Do you still feel that way and what is your forecast for the next two years and what's it based on?
Tom Lee argues that several factors are converging to create once-in-a-lifetime conditions: the US economy could accelerate to 4% growth, America is a net exporter of high-value AI products, misallocated capital in private alternatives will move into public markets, and Millennials/Gen Z will add workforce participation plus inherit generational wealth — setting up some of the biggest stock market gains in our lifetimes after 2026.
Do you think we hit 7700 near term and then there's a pullback after the midterms, and then higher afterwards? Is that the trajectory?
Tom Lee agrees that's his team's best guess. He thinks June markets can still build on gains but at a slower rate, with money moving downstream to beneficiaries of AI. Between June and October the market will need to digest three major IPOs and the new Fed model for inflation, plus normal midterm seasonality, potentially creating a drawdown that feels like a bear market. Then from October a very strong rally starts.
Mark Cuban says he's dumped all his Bitcoin because it's not acting as a hedge against inflation and argues gold is a better bet — what say you?
Tom Lee acknowledges crypto has been disappointing and that there are 'rage quitting' sellers, but argues the thesis for Bitcoin and Ethereum is absolutely not broken. He explains that mass, compute, and energy are what's scarce, and as AI systems evolve they need decentralized identity and verification — which crypto provides. Wall Street wants tokenization for efficiency, and that only happens on Bitcoin, Ethereum, and other smart contract platforms. The bid for crypto will come as focus shifts downstream into the future.
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