The energy sector could gain 10% under Trump, strategist Tom Lee says

The beaten-down energy sector could thrive under the Trump administration to the tune of 10 percent growth, Fundstrat's Thomas Lee told CNBC on Friday.

"We know 40 percent of the economy was in recession, because it was transports, industrials, energy," Lee told "Worldwide Exchange." "Just energy margins going back to median will add almost $10 to S&P profits. That's almost 10 percent growth from one sector."

Lee said that after 15-year lows on profit margins in the energy sector, the boost would provide strategic advantage.

He repeated his recommendation that investors buy CRAP — computers, resources, American banks, and phone carriers.

"This year, we think the strategy that works is 'CRAP,' so it's industrial, tech, the resource sector, which is energy, materials, the banks and telecoms," Lee said.

Banks in particular are experiencing a pre-emptive sigh of relief and driving the market higher on expectations of loosened federal regulations, Lee said.

He warned that the excitement about banks could be overextending the market, noting risks about President Donald Trump's foreign and trade policies, such as his fight with Mexico over trade.

"I think the last eight years have been tough on the private sector. Businesses have been worried about regulation. The last eight years saw the largest jump in restrictive regulations in the history of the economy," Lee said. "The banks [are] a great example."

Lee has been one of Wall Street's biggest optimists. But earlier this month, he made a less-than-bullish call on the market prospects for the year.