Tom Lee: Tech Giants' Bear Market Over, But Other Sectors May Face "Rolling Bear Market"

May 27 — Fundstrat Head of Research Tom Lee warns that while the “Big Tech Seven” have bounced back from their recent slump, overall market risks haven’t fully dissipated, and other sectors may gradually slide into a “rolling bear market” later in 2026. Lee points to strong, sustained AI demand as a key factor that will keep major stock indexes resilient through the end of the year, though he notes internal market divergences will grow increasingly sharp. In an interview with CNBC, he emphasized, “The bear market for the Big Tech Seven and software sector is already over,” stressing that this rebound doesn’t reflect the broader market’s overall health. He identifies three major potential disruptive headwinds: midterm election cycle volatility, sell-off pressure tied to expiring tech company IPO lock-up periods, and tight energy supplies. Of these risks, he flags energy as the most immediate, cautioning that “a reckoning moment is approaching — a shortage of oil product inventories that can’t be resolved in the short term” which will put pressure on energy-dependent businesses. Lee remains bullish on the U.S. economy’s core supports: energy independence and AI-driven productivity gains. He advises investors to focus on areas with strong earnings visibility, stating, “The companies that are really strengthening are those that control scarce resources.” He added that the semiconductor sector is showing signs of overheating, but near-term fund momentum still favors AI suppliers and leading tech firms, while other industries may gradually enter an adjustment phase.