Cantor Fitzgerald’s Eric Johnston: We are bullish on the AI capex outlook despite market scares

Watch on YouTube ↗  |  January 06, 2026 at 15:51  |  3:01  |  CNBC
Speakers
Eric Johnston — Strategist, Cantor Fitzgerald

Summary

Eric Johnston of Cantor Fitzgerald says the overall market backdrop is favorable and he is positive for the full year, but he expects a significant first-quarter drawdown. He cites historical patterns, elevated retail leverage, low free cash flow yield, and AI concentration risk as near-term risks. He remains bullish on the AI capex outlook and sees fiscal stimulus, Fed cuts, and mid-teens earnings growth supporting equities over the year.

  • Eric Johnston is positive on the full-year equity outlook.
  • He expects a drawdown in the first quarter due to leverage, valuations, and historical patterns.
  • He cites individual investor leverage up about 26% and margin balances near historic highs.
  • Free cash flow yield around 3.5% is a multi-decade low, pressuring valuation and buybacks.
  • AI capex concentration in the S&P 500 could create periodic scares.
  • He remains bullish on AI capex for the year.
  • He expects three Fed cuts and mid-teens earnings growth to support stocks.
Ideas
Eric Johnston Strategist, Cantor Fitzgerald 0:26
Expect Q1 drawdown despite bullish year.
He expects a drawdown in the first quarter even though the overall backdrop is favorable for the full year. Reasons include historical backtests showing drawdowns after three-year price performance like the recent period, individual investor leverage up about 26% over six months with margin balances plus leveraged ETFs divided by M2 near a historic high, free cash flow yield at about 3.5% (a multi-decade low) which pressures valuation and buybacks, and high concentration risk in the AI capex theme for the S&P 500 that can create scares and initiate a drawdown.
SPY HIGH
Eric Johnston Strategist, Cantor Fitzgerald 1:19
Bullish AI capex despite intermittent scares.
He remains bullish on the AI capex outlook for the year despite expecting scares along the way. The capex build-out is a powerful, known support, but high concentration in the AI theme for the S&P 500 creates risk of periodic scares that could trigger drawdowns without changing the bullish capex view.
AI capex HIGH
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This CNBC video, published January 06, 2026, features Eric Johnston discussing SPY, AI capex. 2 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Eric Johnston  · Tickers: SPY, AI capex