<p><img src="https://static5.businessinsider.com/image/5faa98cdf7d1cb0019e3abd9-2400/tom lee.jpg" border="0" alt="Tom Lee" data-mce-source="Cindy Ord/Getty Images"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><ul><li><strong>Energy stocks could go parabolic this year and trade like Tesla did in 2020 as investors experience FOMO, Fundstrat's Tom Lee said in a note on Thursday.</strong></li><li><strong>The trade is playing out so far in 2021. The S&P 500 Energy Index is up 13% year-to-date, while the broader S&P 500 has climbed less than 1%.</strong></li><li><strong>With the sector making up just 2.5% of the S&P 500, few investors have exposure to energy stocks, according to Lee.</strong></li><li aria-level="1"><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest'utm_source=markets&utm_medium=ingest" target="_blank" rel="noopener"><strong>Sign up here for our daily newsletter, 10 Things Before the Opening Bell</strong></a><strong>.</strong></li></ul><hr><p>Energy stocks could see a reversal in fortunes this year after a dismal showing in 2020 and stage a parabolic surge like Tesla, <a href="https://fsinsight.com/">Fundstrat's</a> Tom Lee said in a note on Thursday.</p><p>The energy sector fell 37% in 2020 and <a href="https://www.businessinsider.com/power-line-why-oil-prices-went-negative-levels-of-detail-2020-4">briefly saw oil prices dip into negative territory</a> as the COVID-19 pandemic and ensuing travel restrictions sparked a collapse in demand. Over the same time period, Tesla soared 743% as the company managed to barely <a href="https://markets.businessinsider.com/news/stocks/tesla-stock-price-elon-musk-almost-500000-deliveries-2021-1-1029929799">miss its 500,000 full-year delivery goal by only a few hundred cars.</a></p><p>But energy stocks are already starting to stage a rebound, with the sector up 13% year-to-date, while the broader S&P 500 has climbed less than 1%, Lee points out. On top of that, few investors have exposure to energy stocks, with the sector making up just 2.5% of the S&P 500.</p><p>This is the same recipe for FOMO, or the fear of missing out, that helped drive shares of Tesla higher in 2020, according to Lee. A surge in energy stocks could drive fund manager underperformance, given that "many institutional investors have ZERO weighting in energy," Lee said.</p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/cathie-wood-shares-2021-outlooks-on-tesla-economy-bitcoin-ark-2021-1" target="_blank" rel="noopener">Cathie Wood's ARK Invest runs 5 active ETFs that more than doubled in 2020. She and her analysts share their 2021 outlooks on the economy, bitcoin, and Tesla.</a></em></p><p>A new source of buyers from fund managers worried about underperforming their benchmarks could coincide with fundamental improvements to energy companies, as they begin to reverse 4-years "of misery," according to Lee.</p><p>"If this happens, energy stocks could go parabolic in 2021," Lee said. </p><p>Energy stocks could be supported by a decline in supply growth due to potential regulations from President-elect Joe Biden, Lee said, adding that demand is set to recover as a global economic recovery materializes.</p><p>"The re-alignment of the supply/demand outlook for Energy is the most dramatic of any sector," Lee explained. </p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/stock-picks-to-buy-battery-lithium-suppliers-tesla-electric-vehicles-2021-1" target="_blank" rel="noopener" data-analytics-position="2" data-analytics-module="">Global X's lithium and battery ETF returned 126% in 2020 as electric vehicle-driven demand surged. One of the firm's analysts shared 4 stocks he sees 'leading the rise' in the industry going forward.</a></em></p><p><a href="https://markets.businessinsider.com/news/stocks/energy-stock-market-outlook-forecast-tesla-returns-fundstrat-tom-lee-2021-1-1029974918#comments">Join the conversation about this story »</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/how-parasite-delivered-one-of-the-best-twists-in-cinema-2020-2">What makes 'Parasite' so shocking is the twist that happens in a 10-minute sequence</a></p>
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