Tom Lee: NVIDIA's valuation is still low, and some AI stocks are weakening due to capital rotation to NVIDIA

BlockBeats News, August 30th, BitMine Chairman Tom Lee stated on CNBC that after NVIDIA announced strong performance, its stock price rose, breaking the previous norm where positive earnings reports struggled to drive up stock prices. This indicates that investors still value the company's fundamentals. Software stocks such as Salesforce, CrowdStrike, and Okta also strengthened, reflecting a positive market response to AI downstream transactions, showing an overall healthy market reaction.

Regarding Meta, Amazon, Alphabet, AMD, Micron, and other AI-related stocks showing weakness, Tom Lee believes that some investors who were previously underweight on NVIDIA may need to sell other tech stocks to raise funds to increase their NVIDIA holdings. He pointed out that NVIDIA's earnings expectations have been significantly raised, but the stock price has not fully kept pace, with the P/E ratio still contracting, indicating that the current valuation is still relatively low.

Tom Lee also mentioned that data center construction is gradually becoming a political issue in the upcoming midterm elections in the United States. Even some Republican-led states and states supporting data center development are beginning to consider pausing related projects. This may be one of the reasons for the recent poor performance of AI infrastructure-related stocks and more capital flowing into AI downstream targets.