Tom Lee Sees Monday’s NVIDIA Sell-Off as an Overreaction and a Major Buying Opportunity

On Monday, NVIDIA (NVDA) experienced its largest-ever single-day market cap loss, wiping out $465 billion. Tom Lee, head of Fundstrat Research, weighed in on the sharp market sell-off, calling it an “overreaction.” Speaking on CNBC, Lee argued that the substantial drop in NVIDIA’s stock presents one of the biggest buying opportunities since the COVID crash and will likely prove beneficial for investors who act now.

“Markets often overreact to uncertainty, and this situation is no different. This overreaction presents a fantastic opportunity for investors,” Lee commented. So far, his outlook appears correct, with Nasdaq futures climbing 1% after Monday’s 3% drop, and NVIDIA shares up 5% in pre-market trading.

Monday’s massive sell-off resulted in a record $465 billion loss in NVIDIA’s market cap, the largest one-day drop in the company’s history, according to Bloomberg data. Bitcoin (BTC) also saw a significant drop, reaching as low as $97,500 before bouncing back to above $103,000. Bitcoin had briefly surged to $105,000 earlier in the day, but news of China’s DeepSeek AI initiative caused a pullback. Investors will be watching for BTC to reclaim that $105,000 level in the short term.

AI-focused bitcoin miners, such as Core Scientific (CORZ), saw losses of up to 30%, though the stock is slightly higher in pre-market trading.

Lee also pointed to the robust structure of U.S. equities, adding that bitcoin has outperformed both small-cap stocks and financials this year.

Looking ahead to Wednesday’s Federal Reserve meeting, which is widely expected to keep the federal funds rate unchanged at 4.25% to 4.50%, Lee expressed some concern about market expectations, saying that the current hawkish sentiment may be overblown, with too much focus on a potential rate hike in 2025.