Tom Lee: Any pullbacks since April 2025 have been really shallow

Market Trends & Investment Opportunities - Profit taking is normal after reaching all-time highs, with pullbacks expected to be shallow, similar to trends observed since April 2025 [2] - The market is potentially overconcentrated, but AI is considered an undervalued sector, highlighted by Oracle's 41% surge after earnings [3][4] - AI as a theme is continually underestimated, with investors potentially overlooking its future growth and return on investment [5] - Small caps (IWM ETF) are considered even more undervalued than AI, particularly with the anticipation of the Fed cutting rates [6][7] Monetary Policy & Economic Impact - The Fed is expected to cut rates in September, a pattern historically favorable for small cap stocks, similar to 1998 and 2024 [7] - The Fed's rate cut aims to stimulate economic growth, increase corporate hiring, and boost business confidence, which is bullish for small caps [9] - The Fed aims to increase the ISM above 50 through rate cuts [9]