Final warning! Wall Street bull Tom Lee issues a warning: AI and crypto sell-offs are entering the "final weeks," and $ETH is about to rebound. Are you ready?

Market analysis indicates that after a round of concentrated selling, artificial intelligence and crypto assets may be approaching a cyclical bottom. Tom Lee, co-founder of Fundstrat, suggests that the decline in software stocks, tech giants, and digital assets may be entering the “final weeks.”

This judgment comes amid Nvidia releasing a “solid” earnings report, but the market reaction has been relatively muted. Nvidia CEO Jensen Huang publicly stated that the market’s sell-off in the software sector is a “misjudgment.” Whether the market will recognize this view next will directly influence the speed of sentiment recovery for AI-related assets.

In a video briefing to clients, Tom Lee explained his core logic: market bottoms often form amid “bad news.” He specifically referenced a Citriini Research article earlier this week with an “AI doomsday” tone, which he believes may actually signal that a bottom is being built.

From a strategic perspective, he cites the “January barometer” as support for risk assets: historical data shows that after the S&P 500 gains 1.5% in the first week of January and 1.3% for the full month, February tends to be a “profit-taking month,” with a median monthly decline of about 0.4%. March may then turn stronger, with an average gain of 2%, and April often performs even better.

Tom Lee believes that the process of capital retreat from crowded trades is nearing an extreme, indicating that marginal selling pressure is waning. He told clients that the decline in tech giants is “about 95% complete,” the software sector’s sell-off is “about 99% done,” and crypto corrections are in the “final weeks.”

The key to sentiment recovery in AI trading lies in whether the market can bridge the gap between “strong hardware and weak software.” Huang’s counter-signal for the software chain is a clear point of observation. From a fundamental and valuation perspective, Tom Lee evaluated Nvidia’s earnings report, noting record quarterly revenue, strong net profit, and emphasizing that its forward P/E ratio has fallen below 20x—“roughly half the valuation of Costco.”

On the trading front, he observed that software stocks have risen for two consecutive days and considers February 23 as a potential cyclical bottom. The rally in tech giants since February 17 also aligns with the view that the sell-off is nearing its end.

In the crypto market, Tom Lee maintains a bullish stance, believing this decline is close to ending, with particular optimism for $ETH to stabilize and rebound. Notably, Lee is also chairman of Ethereum treasury company BitMine, which may lead the market to see his views as a stronger stance, prompting investors to pay more attention to his potential vested interests.

In terms of industry and style allocation, Tom Lee continues his 2026 thematic framework, reaffirming energy and materials as his favored sectors, both of which have already risen this year. He also believes that in a “stronger 2026,” industrials, financials, and small caps will also have upside potential.

Meanwhile, he has not abandoned his previous core asset outlook, remaining bullish on tech giants, $BTC, and $ETH. Lee, known for recommending stocks at pandemic lows and successfully capturing the 2023 bull market, is considered a relatively accurate market forecaster. However, he has also given more aggressive price targets for crypto assets, including the view that $BTC could easily reach $200,000 by the end of 2025 and potentially rise to $1 million in the coming years.

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