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A well-known analyst company stands by its position. They say we'll see a new ATH later this year.

Charles Sainsbury
27. 4. 2023
4 min read

Everyone is worried about the recession and its possible depth. But against them stands a well-known director of one of the largest and most important analytical companies. He even says that he is convinced that we will be looking at a new ATH in the foreseeable future.

Fundstrat is a leading global analytics and advisory firm founded in 2005 by Tom Lee. Fundstrat focuses on macroeconomic analysis, industries, energy and equities with forecast recommendations for investors. Their analysis and opinions help institutional and private investors in their investment decisions.

Fundstrat has offices in four key financial centres: New York, London, Singapore and Houston. The company employs more than 100 analysts, economists and industry experts.Fundstrat was one of the first analyst houses to use high-quality macroeconomic and industry models to forecast markets and make investment recommendations. Their analytical perspectives were often quoted in leading media outlets such as The Wall Street Journal, Bloomberg and CNBC, as Fundstrat was known for its proactive and optimistic stance, particularly in relation to the growth of the US economy, the industrial sector and technology stocks. Tom Lee and his team often recommended buying stocks that later led to significant gains for investors.

Fundstrat' s successes include early recommendations to buy shares of Apple, Netflix, Tesla, Facebook and Amazon. Fundstrat analysts also frequently recommended buying energy and financial stocks that provided solid returns to investors. Fundstrat's analysis and opinions are widely followed by professional and private investors for their ability to identify future market winners. Although not always correct, their optimistic and proactive recommendations have helped many investors make significant gains.

And now they are coming out again with an extremely optimistic view. While everyone is warning of the coming recession and market crash, Fundstrat and Tommy Lee are expecting a new ATH soon. So who is right?

We are quite far from the highs of 2021-2022.

According to Fundstrat's Tom Lee, better than expected earnings results are capable of fueling the stock market to new highs later this year. Most companies have not yet reported results. But those that did report beat expectations very positively. 79% of companies beat earnings estimates by an average of 6% and 63% of companies beat revenue estimates by an average of 4%.

The big earnings test will come this week, when tech giants like Amazon $AMZN-1.2%, Alphabet $GOOG-1.7% and Microsoft $MSFT-2.5% report results. Lee has high hopes for tech stocks to beat earnings given their strong growth since the start of the year, when the tech sector posted its strongest performance so far this year, despite the recent weakness in April.

"We think technology will reverse this recent weakness as we go through earnings season," Lee said. "We think demand and margins holding up better will support a rally in technology stocks..." Technology could be a winner come earnings season."

And as long as it continues to outperform investor expectations, Lee thinks the stock will climb to new highs this year.

"We think the 1Q23 earnings season will eventually allow the S&P 500 to move to new highs this year," Lee said.

What has Fundstrat done well?

Fundstrat has several notable successes and accurate predictions to its credit. Their biggest success included an early recommendation to buy Apple stock in 2006 when it was trading around $80. Apple stock later reached $233 in 2010, a gain of 186% over four years. This was one of Fundstrat's most notable recommendations.

Fundstrat also made timely recommendations to buy shares of Tesla, Netflix, Facebook and Amazon, which all rose significantly after their recommendations. For example, Tesla's stock has risen from an IPO price of $17 to over $800, a gain of an incredible 4,700% since Fundstrat's recommendation in 2010. Other successes included correctly warning investors about the 2008 financial crisis, predicting a major economic recession, and recommending a reduction in exposure to risky assets. Fundstrat was one of the few analyst houses to warn of the impending crisis.

Fundstrat also accurately predicted the 2004 oil price spike and recommended investing in energy stocks. Oil prices subsequently increased by more than 300% over the next six years. Fundstrat correctly predicted the economic recovery and strong US growth after the 2008 financial crisis. It also predicted strong cyclical growth in the US economy between 2009 and 2015.

But of course he is also often wrong. Anyway, it can be said that Fundstrat is a well-known analyst company and with a long history in the market. Their predictions are trusted by many investors and big names on Wall Street. Will you trust them in this case?

Disclaimer: This is in no way an investment recommendation. It is purely my summary and analysis based on data from the internet and other sources. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.

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