Fundstrat's Tom Lee Buys AI Stocks on Dip, Citing Cisco's 100x Precedent

Fundstrat research head Tom Lee said he is buying AI-related stocks on weakness, arguing the current pullback mirrors a 1990s correction in Cisco Systems (CSCO) that preceded a hundredfold rally. Lee made the call in a video note to clients Monday evening. Lee pointed to diverging market breadth: the equal-weight S&P 500 has gained 2.56% this month through Monday's close, versus 0.51% for the cap-weighted index dominated by large tech and AI names, according to Dow Jones Market Data. He attributed AI jitters to South Korea's Kospi falling below its July low and rising debate over AI-related debt. He traced Cisco's path from about $0.8 a share in 1993-94 to $9 in early 1997, a drop to $5 later that year on tightening-policy and competition fears, then a rebound to $18 and ultimately $80 by 2000. Lee said he is watching Nvidia's (NVDA) GTC event in Berlin, where CEO Jensen Huang speaks Wednesday, and noted third-quarter earnings growth of 23.8% so far. Hedge fund net exposure has fallen to its lowest since 2025's "Liberation Day," he said, citing Goldman Sachs data, leaving room for re-entry.