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Fundstrat’s Tom Lee: S&P Tech at Record High — Is AI Still Undervalued?

Name: Fundstrat’s Tom Lee: S&P Tech at Record High — Is AI Still Undervalued?
Uploaded: 2025-09-12T15:34:24Z
Description: Fundstrat’s Tom Lee joined CNBC’s Worldwide Exchange to argue that AI stocks are still undervalued, citing Oracle’s recent surge as proof of the trend, and noting that small caps could be the biggest winners from the Fed’s September rate cut. ⭐ Get full access to Tom Lee's daily research and strate

9/12/2025, 3:34:24 PM

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Economic Summary

Today's slight pullback after record highs likely reflects profit-taking ahead of the weekend, but since April 2025 pullbacks have been shallow, suggesting market resilience.
The Fed is expected to cut rates in September after a pause; prior instances of a September cut after a pause (1998, 2024) coincided with strong performance for small-cap stocks.
Fed cuts are intended to push the ISM back above 50, encourage corporate hiring, and rebuild business confidence, which would support economic growth and small-cap performance (IWM).
AI is described as undervalued based on Oracle's strong post-earnings move, implying investors may be underestimating long-term AI-related revenue opportunities across software, chips, and hyperscalers.

Bullish

Oracle's 41% post-earnings surge suggests AI-driven growth is underestimated.
September Fed cuts historically benefit small-cap stocks like IWM.
Fed cuts aim to boost growth, hiring, and corporate confidence, supporting small caps.
Pullbacks since April 2025 have been shallow, indicating market resilience.

Bearish

Market valuation and concentration remain a concern despite record highs.
Economic and job-market weakness that prompts Fed cuts could directly hurt small caps.
Minor profit-taking around weekends can cause slight pullbacks.

Bullish tickers

ORCLIWM

ORCL

Bullish

Oracle surged 41% after earnings, indicating investors may be underestimating AI-driven future growth.

IWM

Bullish

Chosen as a pick because historical September cuts after a pause tend to benefit small caps and support growth/hiring.

Bearish

A weaker economy and job market that leads to Fed cuts could negatively impact small-cap earnings and performance.

PLTR

VST

People mentioned

TomFrankJulia Herman