Tom Lee: AI trade still in very good shape fundamentally

Market Sentiment - The market is experiencing a sense of relief as the government shutdown has ended, allowing for better visibility on macroeconomic data and reducing the economic impact on sectors like air traffic [2][10] - There is an expectation that the stock market will rebound as investors regain confidence [1] AI Sector Insights - The AI trade remains fundamentally strong, with significant visibility for AI spending and ongoing innovation in models [3][4] - Despite concerns about high valuations, companies like Nvidia are trading at reasonable multiples, such as 29 times forward earnings, which is lower than other retail giants like Costco [4][5] - Some AI stocks, like Palantir, are perceived as potentially overvalued, but the market is still determining the appropriate valuation model for such companies [6][8] Market Performance and Fund Management - The S&P 500 has seen an 80% increase over the past three years, leading to a challenging environment for fund managers, with only 21% outperforming this benchmark [10] - The market is expected to follow a seasonal pattern, with increased buying activity as the year-end approaches [10] Capital Expenditure in AI - The AI industry is characterized by a need for scale, requiring significant investment in infrastructure, similar to past developments in telecom and energy sectors [12][13] - A few major players dominate the AI landscape, and their investments are crucial for the growth of a broader ecosystem [14]