Stocks still have tailwinds through May into July, says Fundstrat's Tom Lee
Speakers
Tom Lee
— Managing Partner & Head of Research, Fundstrat
Summary
Tom Lee expresses a bullish near-term outlook for U.S. stocks, citing rising earnings, AI-driven productivity, and sidelined cash. He highlights software as a favorable risk/reward bet after recent derating. He also expects oil prices to rise as futures ignore growing supply shortages. He cautions that later in 2026, a new Fed chair and the oil discrepancy could trigger a correction.
- Tom Lee sees tailwinds for stocks through May into July and reaffirms S&P 500 7300 target.
- Software sector is called attractive after derating, with well-managed companies likely to adapt.
- Oil prices are expected to move higher because futures underprice acute physical shortages.
- Investor positioning remains cautious with a lot of cash on the sidelines.
- A potential market reckoning later in 2026 is flagged, tied to the Fed and oil price disconnects.
- AI productivity gains are cited as a structural driver for U.S. corporate earnings.
Trade Ideas
Bullish S&P 500 to 7300
Earnings estimates have risen, the US is a leader in AI with a meaningful productivity lift, investors remain on the sidelines, and the risk/reward is good. Tom Lee sees tailwinds for stocks through May into July and targets S&P 500 at 7300.
Software risk/reward favorable now
Software has become a derating story with investors questioning future earnings, but many companies are well managed and will adapt. The risk/reward is now favorable for well-run software businesses.
