Tom Lee Predicts Bull Market Through 2035, Citing AI, Blockchain As Key Drivers
News Summary
Tom Lee, Head of Research at Fundstrat Global Advisors, forecasts the current bull market will extend through 2035, driven by millennial demographic trends and transformative technologies like artificial intelligence and blockchain. He posits that demographics explain nearly every bull market since 1890, noting that millennials will not reach their workforce peak until 2035. Despite two 20% declines since 2020, Lee identifies a new bull market beginning after the February-April 2025 correction. Current market performance supports this optimism, with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average showing significant year-to-date and five-year gains. Lee further highlights the U.S. leadership in AI and blockchain, alongside a surge in the prime-age workforce from millennials and Gen Z, as key structural drivers for U.S. markets.
Background
Tom Lee is a Managing Partner and Head of Research at Fundstrat Global Advisors, known for his market analysis based on demographics and historical patterns. He has a track record of accurately identifying major market turning points, such as the 2009 market bottom, which underscores the effectiveness of his methodology. The current market environment has seen global equities generally rise since the 2020 lows, albeit with periods of volatility and two significant corrections, creating confusion among investors about the nature of the current market cycle. Lee's analysis seeks to provide clarity by framing current market dynamics within a longer-term, demographically and technologically driven structural context.
In-Depth AI Insights
What macroeconomic and geopolitical risks might challenge Tom Lee's bullish forecast through 2035, particularly within the current Donald J. Trump presidential administration? - While Lee's demographic model has historical validity, it may not fully account for potential trade protectionism, tightened immigration policies, and geopolitical uncertainties (e.g., ongoing trade/tech friction with China, or potential conflicts with Russia/Middle East) under the Trump administration. These factors could cause global supply chain disruptions, elevated inflation, or sudden market sentiment reversals, challenging a smooth growth trajectory based solely on demographics and tech. - Furthermore, macroeconomic variables such as interest rate policies, fiscal deficit sustainability, and global debt levels could pose significant threats to market stability over the next decade, especially if demographic shifts result in slower productivity growth. If AI and blockchain technologies indeed drive the financial sector's share of the S&P 500 to 40% as predicted, what are the deeper implications for traditional industries and market concentration? - This shift implies a structural reallocation of capital, accelerating its flow from traditional 'old economy' sectors towards technology-centric growth areas. This could lead to long-term capital starvation and valuation pressure for conventional industrial, energy, and even some consumer goods companies, exacerbating a 'winner-take-all' dynamic and further increasing market concentration. - For the financial sector itself, it means incumbent giants (e.g., traditional banks and asset managers) must invest massively in these technologies to remain competitive, or risk disruption by new digital financial service providers. Concurrently, regulators will face challenges in effectively overseeing these rapidly evolving technologies that could introduce systemic risks. Beyond demographics and technology, what less-discussed structural factors could influence the long-term trajectory of U.S. markets? - Evolving global de-dollarization trends and a multipolar world order: While the U.S. currently leads in technology, an acceleration of de-dollarization in trade and financial settlements by major economies, or the formation of stronger regional economic blocs, could erode the dollar's reserve currency status, impacting the attractiveness of U.S. assets and capital inflows. - Costs and opportunities from climate change and energy transition: Global efforts to combat climate change will necessitate massive investment but could also structurally impact traditional fossil fuel-dependent industries and drive up production costs. U.S. investment and innovation in clean energy technologies and infrastructure will be critical for its long-term economic competitiveness. - Widening wealth inequality and social polarization: Persistent widening wealth gaps could lead to social instability and the rise of populist policies, introducing uncertainty into market regulation, tax policies, and the corporate operating environment, potentially even leading to antitrust actions against large tech or financial firms.