We could see some of the stock market gains in our lifetime after 2026, says Fundstrat's Tom Lee
Speakers
Tom Lee
— Managing Partner & Head of Research, Fundstrat
Summary
Tom Lee of Fundstrat explains why he expects major stock market gains after 2026, driven by US growth, AI exports, and demographics, but warns of a near-term drawdown before a rally. He also defends Bitcoin and Ethereum, arguing their long-term thesis remains intact despite weakness.
- Tom Lee is bullish on the S&P 500 long-term, citing accelerating US growth and AI exports.
- He expects a pullback between June and October due to IPOs, Fed uncertainty, and midterms.
- After the pullback, he forecasts a strong rally starting in October.
- He defends Bitcoin and Ethereum, saying their fundamental thesis is unbroken.
- Bitcoin's value is tied to network usage and a gold comparison suggests huge upside.
- Ethereum's tokenization and decentralized identity are key for AI systems.
- The spotlight is currently on semis and software, but crypto will benefit later.
- He remains generally bullish but advises vigilance in the near term.
Trade Ideas
S&P 500 long-term bull with near-term pullback
Bullish on S&P 500 over the next two years, expecting some of the biggest stock market gains in our lifetime after 2026. Supported by US economic growth accelerating to 4%, US becoming a net exporter of AI products, capital shifting from private to public markets, and demographic tailwinds from Millennials and Gen Z inheriting wealth. Near-term, between June and October, the market may digest three major IPOs, new Fed policy, and midterm seasonality, causing a pullback that feels like a bear market. However, from October a strong rally is expected to begin. S&P earnings came in $10 higher in Q1, implying $40/year, and at a 20 multiple that adds 800 points to the index.
Bitcoin and Ethereum are long-term buys
Bitcoin and Ethereum remain attractive long-term investments. The crypto thesis is not broken; network usage explains 87% of Bitcoin's rise, and if gold reaches $5,000, Bitcoin's comparable network value would be around $2 million. For Ethereum, tokenization and decentralized identity are key future use cases as AI systems evolve. Despite recent underperformance, the bid for Bitcoin and Ethereum will return as focus shifts from semiconductors to downstream applications.
