Nov 4, 2026 · 40 min
Tom Lee sees a market rebound beyond AI stocks
Tom Lee: The Correction Is Over — Stocks Are About To Surge
The episode tests whether a volatile AI-led sell-off signals deeper structural risk or a reset before broader gains.
- 1Tom Lee argues the Nasdaq correction may be complete as resilient non-AI stocks reveal broader market strength.
- 2Leverage, zero-day options, slowing growth curves, and AI financing concerns explain why technology shares remain unusually volatile.
- 3Apple’s earnings were solid, but margin pressure, a shaky iPhone Duo rollout, and an unclear AI strategy complicate its valuation.
Don't miss
Tom Lee revisits his forecast for the S&P 500 to reach 8,000 and argues the recent sell-off may already satisfy the expected correction.
The brief
Tom Lee argues that the Nasdaq’s AI-led correction has likely run its course, pointing to resilient non-AI stocks and easing fears as evidence of broader market strength.
The debate turns on whether leverage, zero-day options, short investor time horizons, and circular AI financing reflect a dangerous bubble or familiar volatility within a long technology cycle.
Lee revisits his forecast for the S&P 500 to reach 8,000 and considers how a Democratic midterm sweep could reshape market expectations and AI regulation.
Patrick McGee finds Apple’s earnings respectable but warns that rising memory costs, a shaky iPhone Duo rollout, and muted growth make the valuation harder to defend.
The episode’s sharpest contrast is Apple’s decision to avoid the AI spending race while its future still depends on extending the smartphone’s advantage.
What was said on this episode
21 statements · 14 positive · 5 negative · 2 mixed
The Nasdaq correction bottom is very likely already in.
“I think we're now in a position where the bottom is very likely in.”
Listen at 3:58
The Nasdaq-100 ETF will rally at least 15% by year-end.
“I think the tech technology, you know, the triple Q, is going to do at least a 15% rally between now and your end.”
Listen at 4:08
AI is currently producing exceptionally strong innovation.
“This AI story so far is one of pretty remarkable innovation taking place, like otherworldly innovation.”
Listen at 8:40
AI becomes a bubble when use cases lack real end markets.
“I think AI becomes a bubble when we start making up use cases that don't actually have end markets yet.”
Listen at 9:06
The Jevons paradox is still driving AI token usage.
“I think token usage still has the Jevons paradox at work.”
Listen at 12:56
Long-term AI winners may be downstream, second-wave companies.
“the long-term winners... might actually be second wave companies, you know, downstream companies.”
Listen at 15:09
The current sell-off is ending and stocks will rally more strongly into year-end.
“I think we're at the end of that sell-off. I think the rally into year-end will be even stronger.”
Listen at 17:14
The S&P 500 could reach 8,200–8,400 by year-end.
“I think we could be at 8,200, maybe even 8,400 by the end of the year.”
Listen at 17:20
Markets have rallied after every midterm election over the following year.
“100% of the time, markets have rallied. after midterms over the next 12 months.”
Listen at 18:29
Markets will enter relief mode after the midterms.
“So I think markets are going to be in relief mode.”
Listen at 18:35
AI will continue growing after the midterms.
“So I think... AI will grow”
Listen at 19:00
Apple delivered respectable earnings results despite its age and scale.
“these were pretty wild. Sorry, I shouldn't say wild results, just very respectable results for a company that's 50 years old”
Listen at 25:09
The iPhone Duo screen issue is probably an early defect problem.
“I suspect it's the former.”
Listen at 27:33
The severity of the iPhone Duo rollout problem remains uncertain.
“I think time's going to tell how problematic this is going to be.”
Listen at 30:07
Apple could have a highly successful hardware-focused AI strategy.
“Apple could have a very, very winning AI strategy, but it's in hardware.”
Listen at 32:32
Consumers show no sign of stopping iPhone purchases.
“There's just no sign that people are going to stop buying the iPhone.”
Listen at 34:39
On-device AI could encourage consumers to upgrade iPhones every two years.
“then you might want to... upgrade to the latest iPhone every two years or something”
Listen at 35:18
Democrats will win both chambers in the midterm elections.
“I believe that the Democrats are about to sweep. I think they will take the House and the Senate.”
Listen at 37:11
The Democratic sweep will be among the largest congressional defeats ever.
“I think it will be one of the largest congressional defeats in history.”
Listen at 37:16
History will attribute the congressional defeat solely to President Trump.
“And I think it will be remembered in the future as the fault of one person and one person alone. And that is, of course, President Trump.”
Listen at 37:20
The midterms will deliver a resounding vote of disapproval.
“So my expectation is it will be a resounding vote of disapproval.”
Listen at 37:48
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
Books & mentions
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