The Best Part Of This Bull Market May Still Be Ahead
Tom Lee's roadmap for the market through 2027.
The stock market continues to push higher, leaving many investors wondering:
What’s next?
Fundstrat’s Tom Lee recently outlined a three-phase framework for thinking about the next few years, and it’s one of the more interesting market outlooks I’ve seen and decided to share.
Why The Market Keeps Rising
Lee believes much of the market’s rally can be explained by stronger-than-expected earnings.
Wall Street expected roughly $70 per share in first-quarter S&P 500 earnings, and earnings are tracking closer to $80 per share.
That $10 quarterly earnings surprise translates into roughly $40 of additional annual earnings power, which Lee estimates could justify 800-1,000 points of upside in the S&P 500.
His point: this rally has been driven by fundamentals, not just enthusiasm.
📈 Phase 1: More Upside Ahead
Fundstrat originally expected the S&P 500 to reach 7,300.
The market has already surpassed that level, and Lee believes it could potentially move toward 7,700 before the next phase begins.
📉 Phase 2: A Volatile 2026
Lee expects investors to face a period that may “feel like a bear market” even if it isn’t one.
The three issues he’s watching are:
A new Federal Reserve Chair replacing Jerome Powell
Potential energy supply shocks
Large IPOs from companies like SpaceX, OpenAI, and Anthropic that could temporarily pull capital away from existing stocks
His expectation is not a market collapse, but rather a period of digestion and increased volatility over the upcoming months leading into the midterm elections.
🚀 Phase 3: A Potentially Powerful 2027
This is where Lee becomes especially optimistic.
After the market works through those challenges, he believes stocks could enter another strong advance fueled by earnings growth, AI adoption, and improving productivity.
In fact, Lee recently suggested that 2027 could be one of the best years for stock market returns in our lifetime.
The Takeaway
Whether Tom Lee’s forecast proves right or wrong, his framework highlights an important lesson:
Strong bull markets rarely move in a straight line.
Periods of volatility are normal, even when the long-term trend remains positive.
For investors, staying focused on earnings, innovation, and long-term fundamentals is often more productive than trying to predict every market twist and turn.
Want to hear Tom Lee explain it himself? Watch the full CNBC interview here: