In the video, Tom Lee analyzes the stock market’s current state, highlighting the strong performance of Granny Shots compared to the S&P 500 and expressing optimism about Nvidia’s future despite recent challenges. He believes that the AI sector is still in its early stages and that major tech companies will likely maintain their capital expenditures, which will positively impact Nvidia’s growth potential.
In the video, Tom Lee discusses the current state of the stock market, particularly focusing on the performance of Granny Shots and its correlation with the S&P 500. As of April 11th, Granny Shots was priced at $17.67, with total assets of $8,299. Over the past week, it rose by 8.47%, outperforming the S&P’s 5.73% increase. Lee emphasizes the importance of macroeconomic factors, noting that stock correlations have increased, and he believes there are signs indicating that stocks may have reached a structural low, potentially marking the bottom for 2025.
Lee presents a price chart of the S&P 500, highlighting its recent fluctuations. The index fell to a low of 4,835 on April 7th but has since recovered to around 5,300. He anticipates a near-term upside of 2-3% towards 5,500. Lee mentions that the market reacted to comments made by Fed Chair Powell, who emphasized the need for patience regarding the effects of tariffs on growth and employment. Despite some market volatility, Lee believes that the current market conditions are more favorable than during the previous lows.
The discussion shifts to Nvidia, with Lee expressing optimism about the company’s future despite its recent decline. He notes that Nvidia is currently trading at 16 times next year’s earnings, with the street projecting a 23% growth rate for 2026. Lee argues that the AI buildout is still in its early stages, and he believes Nvidia’s position in the market will remain strong. He suggests that the stock’s significant drop from its previous highs may present a buying opportunity, especially if growth estimates are higher than anticipated.
Lee acknowledges the challenges Nvidia faces, including reduced demand from China and export restrictions. He highlights the importance of capital expenditure (capex) decisions made by major tech companies, which could impact Nvidia’s business. If these companies begin to cut their spending, it could signal a broader trend that affects Nvidia’s revenue. Lee emphasizes the need for investors to monitor the earnings reports from hyperscalers, as their performance will provide insights into the demand for Nvidia’s products.
In conclusion, Lee expresses confidence in the long-term potential of Nvidia and the AI sector, despite the current uncertainties. He believes that major tech companies are unlikely to reduce their capex significantly, as they are engaged in a competitive race for advancements in AI. The discussion wraps up with Lee appreciating the insights shared by his guest, Gene Monster, and encouraging viewers to stay updated on Nvidia news through their channel.