Wagner's market outlook

David Wagner, head of equity at Aptus Capital Advisors, sees a sentiment-driven pullback rather than a growth-driven crash in stocks.

“I'd vehemently answer sentiment risk. I mean, anywhere you look right now, there is growth everywhere.”

Sentiment vs growth pullbacks

Wagner distinguishes between sentiment-driven pullbacks caused by fear and growth-driven pullbacks reflecting weakening business conditions.

2025 tariff example

Wagner describes the 2025 tariff tantrum as a growth scare that produced a 17% market decline from peak to trough.

2024 Iran conflict example

Wagner characterizes the Iran conflict pullback as a sentiment scare with the market down about 7% to 8%.

Oil and rates impact

Wagner says oil at $100 a barrel is more noise than a fundamental threat, while 10-year Treasury yields at 5% could weigh on sentiment.

AI spending as structural risk

Wagner identifies a meaningful slowdown in AI spending as the market's main structural risk rather than temporary macro concerns.

“AI has been the center story. It's been the main character for the market for the last three years, and I think it's going to continue to be the main character over the next few years.”

AI infrastructure focus

Wagner prefers companies selling physical inputs for AI buildouts over chipmakers and hyperscalers.

Amphenol as AI connectivity

Amphenol provides connectivity systems for AI server racks and sells components across copper, fiber-optic, and hybrid designs.

Amphenol's growth metrics

Amphenol's data-communications business has grown at 18% with a valuation of 36 to 37 times forward earnings.

Quanta Services power side

Quanta Services provides power infrastructure for AI data centers with a $53 billion backlog up 50% year over year.

Copart as value pick

Copart, Inc. operates an online marketplace for used vehicles with shares down double digits year-to-date.

Copart's market position

Copart gained market share from 2020 through 2024 due to technological advantages after Ritchie Bros. acquired IAA.

Copart's recovery signs

Copart returned a former CEO, has substantial stock ownership, and implemented a new growth plan with share buybacks.

Momentum screening method

Wagner uses momentum in stock prices and earnings expectations to identify investments without chasing every winner.

Avoiding low-quality stocks

Wagner avoids non-earners, especially smaller firms with high leverage and slowing growth.

Investor decision process

Investors should distinguish fear from weakening fundamentals, demand evidence of improving earnings, and ensure each position has a business-specific catalyst.