Tom Lee, who called the market recovery, says big tech stocks are 'unkillable businesses'

Published Wed, Jun 10 20201:28 PM EDT

(This story is for CNBC Pro subscribers only.) Tom Lee, founder and head of research at Fundstrat Global Advisors, said big technology companies deserve their high-flying values after surviving the coronavirus crisis. "These are essentially unkillable businesses," Lee — who called the market rebound — said on CNBC's "Halftime Report" on Wednesday. "We've put them probably through the biggest stress test in five lifetimes and if they've survived i think they deserve higher multiples." Technology stocks have been on a tear since the depths of the coronavirus sell-off. The Nasdaq Composite is trading above 10,000 for the first time ever, up more than 50% above its March low. Some investors are worried the so-called FANG stocks and other technology stocks are overvalued given they are trading at multiples higher than before the pandemic. "If companies don't die, and if they manage to grow, these are incredibly strong businesses," Lee added. "I would argue that on the same level of earnings, all of these companies are worth a lot more money because they've proven you can't kill them." Lee said the U.S. economy is going through a contraction that is worse than the Great Depression. "If you can't kill them in a Great Depression, greater than the Great Depression, I think they're worth a lot more money," said Lee. "The problem with the stock market since 2009 was equity verses premia has been elevated because people didn't trust companies, they didn't trust equities, but these companies produce good numbers, now we've put them probably through the biggest stress test in five lifetimes and if they've survived I think they deserve higher multiples," added Lee. Lee was one of the first Wall Street strategists to call the market's sharp rebound from its late-March lows. In early April, Lee told CNBC that the "faster you fall, the faster you recover," noting the market recovers half of its losses in half the time it took to fall. Lee on Friday reiterated his year-end S & P 500 target of 3,450, which would be a record high. Lee also said he would stick to investing in the companies most beaten down by the pandemic, or the "epicenter groups." The epicenter groups refer to stocks such as airlines, casinos, cruises and real estate among others. Lee said it is where investors will find the most value and upside. "I think they are going to surprise on earnings next year," Lee said.

Tom Lee, Fundstrat Global Advisors

Scott Mlyn | CNBC

(This story is for CNBC Pro subscribers only.)

Tom Lee, founder and head of research at Fundstrat Global Advisors, said big technology companies deserve their high-flying values after surviving the coronavirus crisis.