Tom Lee says NVIDIA’s valuation remains low, and the weakness in some AI stocks may stem from capital flowing into NVIDIA.

BitMine Chairman Tom Lee told CNBC in an interview that Nvidia’s strong earnings report pushed its stock price higher, breaking the recent pattern where positive earnings results failed to lift share prices, signaling investors still value corporate fundamentals. Software stocks including Salesforce, CrowdStrike, and Okta also rallied, reflecting the market’s positive response to downstream AI deals, with overall market reactions remaining healthy. Regarding the underperformance of AI-related stocks such as Meta, Amazon, Alphabet, AMD, and Micron, Tom Lee noted that some investors who had underweighted Nvidia may be selling other tech stocks to raise funds to increase their Nvidia holdings. He pointed out that Nvidia’s profit expectations have been significantly revised upward, yet its stock price has not fully caught up, with its price-to-earnings ratio still contracting, meaning its current valuation remains low. Tom Lee also stated that data center construction is gradually becoming a political issue in the U.S. midterm elections, and even some Republican-led states and states that support data center development are starting to consider pausing related projects. This could be one reason for the recent poor performance of AI infrastructure-related stocks, as funds are shifting more toward downstream AI assets.