Tom Lee: If Gold can rerate higher, then so can equities
Watch on YouTube ↗  |  February 12, 2026 at 00:20 UTC  |  4:46  |  CNBC
Speakers
Tom Lee — Managing Partner and Head of Research, Fundstrat
Scott Wapner — Host, CNBC

Summary

  • Tom Lee argues that the S&P 500 deserves a valuation rerate, drawing a direct comparison to Gold. With Gold (a non-yielding asset) reaching a $40T market cap, he believes Equities (productive assets with earnings) are relatively undervalued.
  • Despite concerns that "AI is wrecking tech" or destroying software demand, Lee counters that AI is moving from "mediocre to quite good," driving productivity and cost savings rather than obsolescence for software firms.
  • Lee dismisses concerns about the market being "expensive" (David Einhorn's view), citing accelerating earnings growth, ISM manufacturing returning above 50, and a Fed that remains fundamentally dovish.
Trade Ideas
Ticker Direction Speaker Thesis Time
SPY /S&P 500
LONG Tom Lee
Managing Partner and Head of Research, Fundstrat 		"Gold is now bigger than the stock market... I think the market's going to have to start to give a higher P E to the equity market, just in the same way that gold's being rerat[ed]." Gold has rallied massively as a "store of value," yet it produces no cash flow. Equities have demonstrated resilience through six "Black Swan" events and are showing accelerating earnings growth. If the market accepts a higher valuation for Gold, logic dictates it must also expand the multiple (P/E) for Equities, which offer both store of value properties *and* growth. LONG. Lee views the high valuation not as a ceiling, but as a midpoint in a repricing event alongside Gold. A resurgence in inflation (CPI data) could force the Fed to abandon its dovish stance, breaking the valuation support. —
SOFTWARE SECTOR /IGV
LONG Tom Lee
Managing Partner and Head of Research, Fundstrat 		Scott Wapner suggests AI is a "shooting gallery" taking down software stocks. Lee counters: "To me, I think what we're seeing is that there is a payoff coming from AI... It ultimately is productivity." The market consensus is currently fearful that AI will replace traditional software (SaaS) companies, leading to a sell-off. Lee argues the "Second-Order Effect": AI is actually a tool that these companies will integrate to drastically improve their own productivity and product value. The current bearish sentiment on software is a mispricing of this productivity boom. LONG. Buy the software dip caused by AI fears, betting on the productivity realization. If AI adoption slows or if "Hyperscalers" stop spending (as noted by the host), the productivity thesis may be delayed. —