"Lee Sees DeepSeek's Impact as Overblown, Nvidia to Bounce Back"

Fundstrat's Tom Lee, the chief investment officer, has weighed in on the recent market correction, attributing it to an overreaction to the release of the low-cost Chinese artificial intelligence (AI) model, DeepSeek. In an interview on CNBC's "Closing Bell," Lee expressed his view that Monday's market sell-off, which saw stocks and crypto plummeting, is an opportunity for long-term investors.

Lee believes that the market's fear stems from uncertainty and the potential implications of DeepSeek for AI chipmaker Nvidia (NVDA), one of the hardest hit stocks. He argues that the market's reaction is an overreaction and that the Nvidia decline is reminiscent of the market conditions in March 2020, which ultimately proved to be a significant opportunity for investors.

Lee also discusses the nature of technology and the likelihood of Nvidia becoming obsolete in the wake of DeepSeek's release. He expresses his surprise at the possibility of Nvidia being replaced by a new model that doesn't require graphics processing units (GPUs) entirely. Given the global labor shortage and Nvidia's chip dominance, Lee remains bullish on the company's prospects.

In addition to his views on the tech sector, Lee shares his bullish outlook on the financial sector for 2025. He cites the new administration, a dovish Fed, and low yields as factors that could lead to upside for capital markets activity and multiples. As a result, Lee considers financials to be the number one S&P sector idea for the year.