Tom Lee, co-founder of Fundstrat Global Advisors and chairman of Bitmine, said the recent selloff in artificial intelligence-related stocks has likely reached a bottom. Speaking on CNBC, Lee argued that strong underlying demand continues to face supply bottlenecks rather than excess capacity, reducing the risk of deeper declines in the sector.

Lee noted that political resistance and spending limits have slowed AI-related growth without signaling an end to the broader investment cycle. He described the current environment as one in which companies building the infrastructure for AI services, including data centers and chipmakers, still struggle to convert orders into finished products and revenue at the pace customers require.

Tight Conditions Define the AI Market

Lee stressed the importance of distinguishing between industries facing oversupply and those limited by insufficient production capacity. In his view, the AI sector remains firmly in the latter category. Growth has been tempered by spending constraints, yet these pressures do not indicate a market peak, he said.

He acknowledged the difficulty of identifying a trough in real time. Bottoms carry inherent risk because the full extent of potential further declines remains unclear until prices stabilize and begin to recover.

Intel’s recent results illustrated the dynamic. The company’s data center and AI segment delivered 78 percent year-over-year revenue growth to $7.3 billion. Despite that strength, manufacturing constraints limited its ability to meet demand fully. Intel guided for fourth-quarter revenue of $15 billion to $16 billion, roughly $1.6 billion below analyst expectations. The weaker performance in its PC business added pressure, and the stock fell nearly 30 percent to $65.76 following the report.

Crypto Reaction Offers Additional Signal

Lee also pointed to cryptocurrency markets as a useful gauge of risk appetite. He highlighted the relatively restrained response to a major security incident at Binance, one of the largest crypto exchanges. The exchange initially estimated the impact of the breach at approximately $6.3 billion after hot wallets were compromised.

Bitcoin declined about 4 percent to near $76,400 in the aftermath, while more than $1.3 billion in leveraged positions were liquidated. U.S. spot Bitcoin exchange-traded funds recorded $643.2 million in net outflows on the same day, the largest single-day withdrawal of the month. Binance froze around $3 billion in affected assets and stated it would cover customer losses using emergency reserves and company funds.

Lee interpreted the limited price decline as evidence that much of the selling pressure may already have been exhausted. He suggested that if cryptocurrency serves as a leading indicator for broader risk sentiment, the muted reaction implies fewer risk-averse investors remain positioned to drive prices substantially lower.

Lee contrasted the episode with an earlier breach at Bybit in 2025, which was smaller in scale yet produced a sharper decline in crypto prices at the time. The ability of Binance to absorb the losses and the absence of cascading failures across decentralized finance protocols supported his assessment that the market had shown increased resilience.

The strategist’s comments came after a period of weakness that extended beyond pure AI names into broader technology holdings commonly found in retirement portfolios. Lee maintained that the combination of constrained AI supply and the crypto market’s absorption of negative news pointed to reduced downside risk in the near term.