Fundstrat’s Tom Lee thinks 2027 and 2028 could represent a one-in-a-lifetime time period for stock gains.

Lee says in a new interview with CNBC that stocks could witness challenges between now and December and encourages investors to remain “vigilant but generally bullish.”

He notes that three potential major initial public offerings and midterm election seasonality could impact stocks. Lee also says the market will likely attempt to “test” Kevin Warsh, the new chairman of the U.S. Federal Reserve.

But the longtime equities bull notes that two big factors are fueling his optimistic outlook on stocks going into 2027.

[3:10] “One is, I think the US economic growth rate is actually starting to step up. In other words, we could grow at 4%. And for the mature, largest economy in the world to start to accelerate growth, that’s pretty astounding. 

The second is the US is one of the biggest exporters of the most important tool in the next 10-15 years, which is AI products. And that means we are essentially a net exporter of a high-value product.

And there’s so much capital I think misallocated today because so much of it is held in private alternatives, but it’s going to move into the public markets. So I do think that, plus the demographic tailwind of millennials and Gen Z adding to the workforce, but then also beginning to inherit generational wealth, I think that is going to set up for after 2026, perhaps over the next two years, some of the biggest gains in the stock market in our lifetime.” 

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Fundstrat technical strategist Mark Newton says the US stock market is poised to broaden beyond semiconductors and memory stocks, warning that tech has gotten “over its skis” after an 18% rally in eight weeks and is likely to consolidate through the summer.

Speaking in a recent interview, Newton identified financials, industrials, consumer discretionary, and healthcare as the sectors best positioned to play catch-up as technology cools. He noted that the XHS healthcare services ETF recently broke to new all-time highs, calling it an encouraging sign that broadening is underway.

“I am optimistic that we can start to broaden out. I do suspect that technology is going to need to consolidate at some point in June and or July. Difficult to see an 18% rally in 8 weeks just continue at the same pace. It’s highly unlikely, and we’re going to need to consolidate.”

Newton said the overall market is not overextended, but many investors have been cautious amid a leadership transition at the Federal Reserve and lingering geopolitical tensions. He noted that investors who lack sufficient exposure to high-weighted semiconductor and memory names have struggled to keep pace with the S&P 500.

Newton said he is not bearish and expects the consolidation in tech between July and October to create buying opportunities heading into the midterm elections.

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