Trump’s presidency could help small-cap stocks soar in the coming years, Fundstrat’s Tom Lee says

• Tom Lee says penny stocks could head for a big upside during Trump’s second term.

• “I believe small caps can outperform by more than 100% over the next two years,” he said.

• Lee predicted in July that small businesses would surge 40% through the rest of this year.

A Donald Trump presidency could deliver massive gains to a certain corner of the stock market in the coming years, according to Fundstrat’s head of research, Tom Lee.

talking to CNBC On Friday, the influential stock forecaster said he expects a big rise for Small stocks In the coming years. This is thanks to Donald Trump’s victory in the recent elections, which… It sent stocks soaring This week as traders anticipate a new economic agenda, A A more flexible regulatory environmentAnd reduce taxes.

Small-cap stocks have performed well so far this year, with… Russell 2000 Up to 18%. However, Lee noted that the small-cap index trades at about 10 times average forward earnings, reflecting a lower valuation than the S&P 500, which trades at about 17 times forward earnings.

“I think there’s still a lot of upside,” Lee said. “So I think small caps can outperform by more than 100% over the next two years,” he added.

Lee, who previously predicted a small maximum Russell 2000 index could rise up to 40% Before the end of the year, he also said he saw significant gains ahead for the other assets pooled in trump trade, A handful of investments believed to benefit under the president-elect’s policies.

Lee predicted that Bitcoin, which hit a record high this week, could exceed $100,000 by the end of the year. Meanwhile, he said the S&P 500 could rise another 5% to 10% through the end of the year, noting the size of previous post-election rallies.

“Part of the reason investors are feeling optimistic is that President Trump will take office again, but this time with a lot of knowledge about how to build a Cabinet and a team, so this in some ways becomes more market-friendly,” he added.

However, doubts are looming over some aspects of Trump’s economic agenda, which experts have warned may do just that Stoke inflation and maintain interest rates higher for longer. Trump’s policies were supposed to be like that More inflationary Of Harris by 70% of economists surveyed, according to a survey conducted by the Financial Times and the University of Chicago.

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