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- Fundstrat’s Tom Lee says tech stock’s market leadership is fading as energy, financials, and cyclicals takeover.
- The Head of Research at Fundstrat argued investors aren’t “bullish enough about the reopening.”
- Lee sees the reopening of the US economy post-pandemic as akin to a “post-war reconstruction period with government stimulus.”
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Tech stocks’ market leadership may be fading and investors aren’t “bullish enough about the reopening,” according to Fundstrat’s Tom Lee.
Lee made an appearance on CNBC’s “Fast Money” on Wednesday. In the interview, he said he sees tech stocks’ market leadership fading as the post-pandemic reopening gets underway.
“I think tech’s leadership, which was so astounding for the past decade, I think we’re seeing a new leadership emerge,” Lee said.
The managing partner and head of research at Fundstrat Global Advisors argued energy, financials, and cyclicals are leading the way now. And according to Lee, that means “a vigorous economic recovery is underway.”
Lee argued that the leadership of cyclicals will hurt tech and growth focused stocks going forward as well.
"These cyclicals could turn into growth stocks which means traditional growth stocks aren't as shiny and interesting," he said.
Lee also expects a faster reopening than other observers, arguing "people aren't bullish enough about the reopening," although he noted that "nobody can say COVID has been vanquished."
Lee said although his reopening bullishness might be looked at as a "contrarian view" he sees the current era as a type of "post-war reconstruction period with government stimulus."
He added that is "extremely boomy for real investment spending which is the biggest multiplier to GDP."
Lee isn't alone in the crowded reopening trade, but his somewhat bearish view on tech stocks is a shift from the norm. Lee has been a fan of tech stocks, and in particular Big Tech, for some time.
The head of research at Fundstrat even called big tech companies "unkillable businesses" in an interview in June of last year. For now though, Lee recommends avoiding the names.
His view isn't shared by all, though.
Analyst Dan Ives from Wedbush Securities said in a note to clients on Wednesday that he believes "tech stocks have another 25%+ upward move in the cards over the coming year led by FAANG, cloud, and cybersecurity names despite this risk-off moment on the Street."