Fundstrat’s Tom Lee Thinks the Momentum Trade Will Keep Going, Predicts the S&P 500 Will Surge up to 7,000 by End of 2025

Fundstrat co-founder and managing partner Tom Lee thinks equities still have more room to run.

Lee says in a new interview on CNBC that the momentum trade isn’t finished, pointing to the artificial intelligence (AI) sector.

“For instance, if we take AI as a thought, and we overlay, let’s say, something like the exponential growth of the wireless industry, that was a 20-year period when the number of users went from 37 million subscribers to 7 billion.

We don’t have 7 billion ChatGPT users, and we don’t have 7 billion robots. Not yet. And so if someone’s trying to ring the bell at the top for AI, they’re underestimating how quickly penetration grows. We’re probably in the first quarter or first third of that cycle for AI.”

Lee thinks the U.S. Federal Reserve will cut rates and kick off a “dovish pivot” that gives business leaders more confidence. The Fundstrat executive also notes that “positive seasonals” favor higher stocks and predicts that the S&P 500 will surge to 6,800-7,000 by the end of 2025.

The leading stock market index is trading at 6,501.86 at time of writing and is up 1.84 in the past 5 days and 1.75 in the past month.

In a different interview, Lee predicts the bull market could last until 2035.