Fundstrat’s Tom Lee, known for his consistently bullish forecasts for stocks, believes certain classes of stocks could face a bear market later this year.
Lee says on CNBC’s new channel interview Parts of the stock market look weak due to “mid-term seasonality,” oil shortages and a wave of upcoming initial public offerings that he says could lead to oversupply.
But the Wall Street veteran believes the next bear market will spare some notable sectors.
“I think there will be a bear market in other stocks later this year, yes, but I think the Mag-7 and software will be taken away.
So, names will either be higher or will be affected by the fact that there is a lot of new inventory coming later this year, or companies that will be hurt by the shortage of petroleum products. So I think there are reasons why we may face headwinds later this year.
Semiconductor stocks “could become a bubble,” Lee adds.
“To me, it doesn’t look like a bubble yet. When Nvidia is trading at 19 times earnings, I think it’s still a good risk/reward, but I think there are parts of this ecosystem that have become very expensive.”
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