AI Alpha Framework
Four Engines of AI-Driven Value Creation
AI Alpha invests across four interconnected engines — each capturing a distinct economic mechanism through which AI creates durable, compounding value. From the physical grid infrastructure that powers intelligence, to the semiconductors that process it, to the platforms that deploy it, to the enterprises that harvest it.
Energy, Grid & Physical Infrastructure
Power
The physical foundation that makes AI possible at scale. Data centers are projected to consume 8% of US electricity by 2030 — demand that is long-dated, contracted, and structurally underappreciated by most investors. AI Alpha has meaningfully increased its Power allocation to reflect this conviction.
Key: Nuclear generators · Grid & Transmission · Advanced Cooling · Power Equipment
Semiconductors, cloud & networking
Compute
The digital engine processing every AI workload. Every model trained, every inference run passes through Compute — the most directly levered engine to AI adoption volume. Targets GPU architects, cloud hyperscalers, and AI networking infrastructure.
Key: GPU & Accelerators · Cloud Hyperscalers · AI Networking · Foundries & Memory
PLATFORMS, SOFTWARE & AI SYSTEMS
Builders
The intelligence layer transforming raw AI capability into deployable enterprise value. Builders develop platforms, vertical solutions, and AI-native software that become mission-critical — evaluated on data moat defensibility and switching costs.
Key: AI Platforms · Foundation Models · Vertical AI · Proprietary Data Networks
AI-DRIVEN EFFICIENCY & COMPETITIVE ADVANTAGE
Operators
The economic harvest layer — enterprises converting AI capability into measurable margin expansion and durable competitive advantage. Focuses on quantifiable cost displacement where ROI is trackable to the basis point.
Key: Automation & Robotics · Workforce AI · Healthcare AI · Cyber & Logistics
Portfolio construction
Portfolio Attributes & Construction Framework
Dual architecture: individual stocks for concentrated alpha generation, and thematic ETFs for diversified baseline exposure across every PCBO engine. No structural blind spots.
PCBO Target Allocations
Stock + ETF Architecture
INDIVIDUAL STOCKS
- Concentrated alpha bets
- Full 5-layer scoring required
- Position sized 1–6% by composite score
- Highest-conviction ideas only
- All decision rules & safeguards apply
THEMATIC ETFS
- Broad diversified coverage (30+ names)
- Baseline PCBO engine exposure
- Low-cost complement (avg 0.35% ER)
- Eliminates structural blind spots
- Complement, not replacement, for stocks
Risk Management
The Full AI Value Chain:
Portfolio reviews aligned with weekly cadence and market conditions.
PCBO Diversification:
Spans all four engines — reduces single-sector concentration risk.
Stop-Loss Triggers:
Defined guidelines and performance monitoring to balance growth with safeguards.
Cash as Strategy:
5–20% cash floor; deployment only when scoring thresholds are met.
Score-Based Sizing:
Position size tied directly to composite scores; overweights are trimmed.