Nvidia shares climbed after the company's strong earnings, breaking a stretch where good reports failed to move stocks, according to Tom Lee, chairman of BitMine. Speaking on CNBC on August 30, Lee said the move shows investors are still focused on fundamentals. Software names such as Salesforce, CrowdStrike and Okta also rose, which he called a healthy market response to AI downstream trades. At the same time, weaker performance in Meta, Amazon, Alphabet, AMD and Micron could reflect investors who were underweight Nvidia selling other tech holdings to fund bigger Nvidia positions. Lee added that Nvidia's earnings estimates have been lifted sharply but the stock has not fully caught up, leaving its price-to-earnings ratio still contracting and the valuation relatively low. He also noted that data center construction is becoming a political issue in the U.S. midterm elections, with some Republican-led states and states that have supported data center development considering project pauses — a possible reason AI infrastructure stocks have lagged while capital rotates toward AI downstream names.
Tom Lee, chairman of BitMine, said on CNBC that Nvidia's share price rally after strong earnings broke a recent pattern of good results failing to lift stocks, a sign investors still care about fundamentals.
Lee pointed to strength in software names such as Salesforce, CrowdStrike and Okta as evidence that AI downstream trades are getting a healthy market response. But he also addressed weakness in AI-related stocks including Meta, Amazon, Alphabet, AMD and Micron. Some investors had been underweight Nvidia and may be selling other tech names to fund bigger positions in the chipmaker, he argued.
Lee noted that Nvidia's earnings estimates have been raised sharply, yet the stock has not fully caught up, with its price-to-earnings multiple still contracting. That leaves the valuation looking low, he said.
He also flagged a political angle: data center construction is becoming an issue in the U.S. midterm elections. Even some Republican-led states and states that have supported data center development are considering pausing projects, which could help explain recent weakness in AI infrastructure stocks and a shift of capital toward AI downstream names.
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