Fundstrat's Tom Lee Says Democratic Midterm Sweep Could Spark 15% to 20% Tech Rally

Fundstrat managing partner and head of research Tom Lee told CNBC's "Closing Bell" that tech stocks could rally at least 15%, and perhaps 20%, as hedge funds rebuild technology exposure after the Democratic midterm sweep. In early trading, the Dow rose 2.3%, the S&P 500 rose 1.7%, and the Nasdaq Composite rose 2.1%, while Amazon gained 7.1% and Alphabet gained 3.4%. Data center operators IREN, Hut 8, Applied Digital, and Core Scientific lost 1.2% to 13% on Wednesday, a move Lee called an overreaction. Lee estimates about half of hedge funds focus on technology, media, and telecom and expects them to return to tech, with hyperscalers leading the rebound. Goldman Sachs economists warned that Democratic state and local wins could bring temporary data center construction pauses affecting about 45% of planned US capacity growth. Lee also cited financials and industrials as favored sectors, and a CNBC host said crypto rallied as Democrats now push to pass crypto legislation they opposed before the midterms. Lee's rebound case weakens if opposition to data centers spreads beyond Texas and Georgia.