Fundstrat’s Tom Lee is calling for stocks to get the gold treatment with higher valuations, pushing back on David Einhorn’s warning that this is the most expensive market ever.

Speaking on CNBC’s Halftime Report on Wednesday, Lee defended sky-high equity prices and said the market deserves to re-rate higher.

Markets are whipsawing like never before.

The S&P 500 (NYSE:SPY) went from overbought to oversold back to overbought in a week or less for the first time in history, according to Goldman Sachs’ Tony Pasquarello

Lee acknowledged the market is expensive but said the fundamentals back it up.

Earnings growth is accelerating.

The ISM Manufacturing Index just broke above 50 after three years below it, marking the end of the longest manufacturing contraction in history. And the new Fed chair is likely dovish.

“The market’s going to have to start to give a higher P/E to the equity market, just in the same way that gold’s being rerated,” Lee said.

The Gold Playbook

Gold (NYSE:GLD), having risen sharply over the last year, now sits at a $35 trillion market cap.

Lee’s argument is simple: if gold can get revalued higher as a store of wealth, stocks can too given they’ve survived COVID, tariffs, and multiple black swans while still growing earnings.

“Gold has become like this singular monolithic trade that’s worked,” Lee said. “Gold is now bigger than the stock market.”

He noted investors are questioning whether they should even use stocks as a store of value when they can just buy gold.

Jobs And AI

Wednesday’s hot jobs report confused traders who expected AI to be displacing employment. Lee said Friday’s CPI will be critical. If inflation stays tame while jobs stay strong, that’s the sweet spot.

On AI disruption, Lee stayed bullish. Software getting disrupted means cost savings for clients, which equals productivity gains, not a market negative.

What Prediction Markets Say

On Polymarket’s “Bitcoin vs Gold vs S&P 500 in 2026” market, gold currently leads with 53% odds versus the S&P’s 26% and Bitcoin’s 21%.

Meanwhile, Polymarket traders are giving the S&P 500 a 37% chance of hitting $7,100 by end of February and a 60% chance of reaching $7,040.

Lee quoted the old adage: “bull markets don’t die of old age, they get murdered by the Fed.”

With a dovish Fed and accelerating earnings, he sees room for multiples to expand further.

Lee’s conviction comes as his Ethereum treasury company BitMine Immersion Technologies (NASDAQ:BMNR) faces paper losses of $6.6 billion on its ETH holdings.

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