Fundstrat's Tom Lee told clients the S&P 500 could climb to 7,900-8,000 this month, up to 3.6% above Wednesday's close. The index has already gained 3.1% in August to an all-time high, led by tech and chip stocks, with Lee citing accelerating earnings and a positive technical read.
Tom Lee, head of research at Fundstrat Capital, told clients in a video late Wednesday that he thinks the S&P 500 could reach 7,900 to 8,000 this month. That range implies upside of 2.3% to 3.6% from Wednesday's close of 7,723.55.
A base built over eight to ten weeks
Lee said the market had been consolidating for the last eight to 10 weeks, and that a longer base tends to produce a bigger breakout. "I think we can get to 7,900 or 8,000" this month, he said.
Tech and chips drive the August gain
The S&P 500 has already gained 3.1% in August to reach all-time highs, boosted by strong second-quarter profits and hope that a deal can reopen the Strait of Hormuz and free up oil traffic in the Persian Gulf. Tech stocks have led the advance, with the sector soaring 5.8% so far this month.
Chip stocks have outperformed within that group. The VanEck Semiconductor ETF is up 5.4% in August, while the Roundhill Memory ETF has popped 6.7%.
Technicals and earnings back the call
Lee also pointed out that the Nasdaq-100 sits above its 20-, 50- and 200-day moving averages, which he called technically positive.
Still, he said investors should stay diversified: he remains bullish on semiconductors, DRAM and memory even as those stocks correct, expecting a recovery led by the Magnificent Seven, software and ethereum.
Beyond the technicals, strong earnings momentum is not just lifting second-quarter results, he said. It's also driving estimates higher for 2027.
Source: US Top News and Analysis
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