Market expert calls Nvidia Sell-Off an Overreaction, Sees Buying Opportunity

Fundstrat’s Tom Lee believes investors are overreacting to the recent market sell-off sparked by the emergence of DeepSeek, a low-cost AI model from China.

Speaking on CNBC’s Closing Bell, he suggested that the downturn, which hit both stocks and crypto hard—particularly AI chip giant Nvidia—could present a strategic buying opportunity.

According to Lee, markets thrive on predictability and are often shaken by sudden disruptions. He compared Nvidia’s steep decline to its worst drop since March 2020, a period that ultimately proved lucrative for long-term investors.

While uncertainty around AI competition is unsettling, he remains skeptical that Nvidia’s dominance could be dismantled so quickly. Unless an AI model emerges that completely eliminates the need for GPUs, he sees no fundamental reason for Nvidia’s sell-off to be justified.

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Beyond the AI sector, Lee is optimistic about financial stocks in 2025. He pointed to factors such as a more accommodative Federal Reserve, a new administration, and stabilized yields that could benefit banks and capital markets. With valuations still low, he sees financials as the most promising sector in the S&P 500 for the year ahead.

Alexander Zdravkov