Fundstrat Recap: Tom Lee on the AI Sell-Off, Falling Yields and the Midterms

The latest full video on the official Fundstrat YouTube channel that features Tom Lee, "Is the AI Sell-Off Near Its End?", was posted on October 22, 2026. It is a short TV-style interview clip in which a host talks with Tom Lee, Fundstrat's co-founder and head of research, who is also introduced as a CNBC contributor. They discuss the recent pullback in AI-related and tech shares, whether AI is a bubble, interest rates, and what he expects around and after the US midterm elections.

This is an independent summary written by GNOUP. It is not affiliated with, sponsored by or endorsed by Fundstrat, CNBC or Tom Lee. The views, forecasts and predictions described below belong to the speakers, not to GNOUP. Nothing here is investment, financial or tax advice, and nothing here is a recommendation to buy or sell anything. Forecasts can turn out to be wrong, and past performance does not guarantee future results. Please consult a licensed financial professional before making financial decisions.

Key points

These are Tom Lee's opinions and predictions as stated in the video. We have not independently checked the figures he mentions.

• "Concerns are what keep AI from becoming a bubble." Asked about the view that worries have simply popped a bubble, Lee said he sees it the other way around. He pointed to continued AI discoveries and productivity gains, and said that as long as those keep coming, he believes money invested in AI is still earning returns. In his view, tight debt markets are helping prevent a runaway speculative boom, which he called a "healthy correction."
• Is there too much money going into AI? He says no. Lee said AI does need a lot of dollars. He cited a Fundstrat report estimating about 30 trillion dollars of AI spending over the next 25 years, and compared it with roughly 25 trillion each that he said was spent on the mobile network build and on roadways. He also said Americans earn about 7 trillion dollars a year in interest income, so in his view there is plenty of capital available to fund it. He argued AI may be an even more important infrastructure build than mobile.
• His view that the sell-off is near its end. Lee said he believes the sell-off is in its late stages because betting against tech has become a very crowded, "consensus" position. He also said two earlier worries had eased in his view: central-bank policy that had been hawkish may be shifting toward dovish, and interest rates that had been touching 5% (with some people fearing 6%) were back below 5%.
• Remaining worries he named. He said debt markets are "kind of closed at the moment" and that there is uncertainty about "the war." He also noted that investors were nervous in other ways, pointing to defensive areas of the market, such as waste management, rallying.
• A history comparison. Lee compared today with 1997, a few years after the public internet and web browsers arrived, when he said Cisco, then the biggest stock, fell about 50% and then recovered strongly within a year. He said he sees a similar setup now, with ChatGPT about to mark its third anniversary and the AI trade still early in his view. This is his historical comparison, not something GNOUP has checked.
• Which parts of the market he talked up. When asked where opportunity might be, Lee said he thinks the heavily sold AI-related chip and large-tech areas are "bottoming," and that he also likes software, crypto and a broad group of economy-sensitive (cyclical) stocks. He described the market as a "coiled spring." These are his personal views as given in the interview, not suggestions from GNOUP.
• The calendar view. He said the next couple of weeks carry uncertainty heading into the midterm elections, and that he expects the market to be generally cautious until then. His prediction was that after the midterms the market will "rally broadly and very strongly."

What to watch

These are items the speakers raised, not findings by GNOUP.

• The AI bubble debate. The host raised the view that the worries have simply popped a bubble, and Lee himself acknowledged there are two sides to the debate before arguing his own. Other analysts may disagree, so treat this as one opinion in an ongoing debate.
• Interest rates and central-bank signals. Lee tied the mood in markets to rates falling back below 5% and to a possible shift in tone from the Fed. Whether that holds is a forecast.
• The midterm elections. Lee's forecast was a cautious stretch before the vote and a strong rally afterward. Timing predictions like this are uncertain by nature.
• Market breadth. He noted the market had broadened, but in what he called not such a great way, since defensive areas were leading. He also said that could be read as a positive sign for breadth.
• Fundstrat's own promotions. The video description promotes a free weekly newsletter and a paid 30-day trial of Fundstrat research. GNOUP has no connection to those offers and does not endorse them.

Watch the episode

Is the AI Sell-Off Near Its End? on YouTube (Fundstrat official channel, posted October 22, 2026)

Episode guide

The video's description does not list chapters, and the transcript we used had no time markers, so we are not able to give accurate timestamps. Rather than guess, here is the order in which the topics came up. Open the video on YouTube and use its own progress bar to jump around.

1. The host introduces Tom Lee and asks whether AI worries are preventing a bubble or popping one.
2. Lee explains his "healthy correction" view and why he thinks AI money is still earning returns.
3. The size of AI spending versus the money available to fund it.
4. Whether to "buy the sell-off": crowded bets against tech, easing yields and a shifting Fed.
5. Where Lee sees opportunity, including AI-related, software, crypto and cyclical areas.
6. The 1997 Cisco comparison and why he calls the AI trade early.
7. Other parts of the market, breadth and defensive groups rallying.
8. The midterm elections and his prediction for the period after them.

About this summary

This recap was prepared from the video's title, description and an automatically generated transcript of the interview. Automatic transcripts can contain errors, so some names, numbers and phrases may differ from what was said. For the exact words, watch the video. We could not confirm the video's exact running time or check the claims made in it. This article is general information only. It is not investment, financial or tax advice, it does not recommend buying or selling any security or asset, and it is not a substitute for advice from a licensed financial professional.