Machine Economy 40

The public-market index for the AI buildout economy.

ME40 tracks 40 companies across the full AI value chain: compute, cloud platforms, data centers, power, grid infrastructure, enterprise automation, cybersecurity, robotics, and life-sciences AI.

View methodology Download factsheet

Research use only. Not investment advice. Index methodology is draft v1.

Core thesis

AI is not only a software story. It is a capital buildout cycle.

The companies most exposed to AI are not limited to apps and model wrappers. The machine economy requires chips, fabs, hyperscale cloud, memory, data-center networking, cooling, electricity, grid upgrades, security, automation, and industrial deployment.

ME40 is built to represent that full stack rather than defaulting to another mega-cap technology basket.

Methodology discipline

Forty names. Sector sleeves. One-in, one-out.

The index targets a fixed 40-constituent structure. New IPOs — including future model labs — should enter only after eligibility review and normally require removing the weakest incumbent.

40-stock limit

Maintains brand clarity, index discipline, and a scarce flagship list.

Quarterly rebalance

Reset constituents to target weights while preserving sector sleeve structure.

Semiannual review

Evaluate exposure purity, liquidity, strategic relevance, and emerging IPOs.

No day-one IPO chase

New public companies should generally season for 60–90 trading days before consideration.

Sector allocation

Designed around the AI buildout stack.

The sleeve weights deliberately include physical infrastructure — semiconductors, data centers, electricity, grid services, and cooling — alongside cloud platforms and AI software.

AI Compute & Semiconductors28%

Cloud, Platforms & AI Distribution23%

Data Centers, Networking & Cooling13%

Energy, Grid & Electrification12%

Enterprise AI Software & Automation12%

Cybersecurity & Identity6%

Robotics, Autonomy & Industrial Automation4%

Healthcare & Life Sciences AI2%

Current draft constituents

The 40-company buildout basket.

Filter by sleeve

Illustrative backtest

ME40 vs. SPY and QQQ.

Backtested with Yahoo Finance adjusted-close data using the current draft constituent and weight set. Results are hypothetical and should be independently verified before publication.

ME40 illustrative backtest performance chart versus SPY and QQQ

Start: 2023-01-03 Base: 1000 ME40 total return: +526.0% Max drawdown: -34.1%

A deliberate exclusion

Why Apple is not in v1.

Apple is excluded not because it lacks AI relevance, but because ME40 is focused on the companies building and powering the AI economy — not merely distributing AI features to consumers.

Apple remains a watchlist candidate if its exposure becomes more direct through AI compute, developer infrastructure, or measurable AI monetization.

Download the Apple exclusion note

Downloads

Professional research documents.

Polished public PDFs are available below. Implementation files are available to subscribers and prospective partners by request.

PDF ME40 Index FactsheetOverview, allocation, backtest snapshot, and current constituents. Download

PDF Methodology40-stock rule, sector sleeves, rebalance cadence, and IPO policy. Download PDF Backtest summaryIllustrative ME40 performance exhibit versus SPY and QQQ. Download PDF Apple exclusion notePublic rationale for why Apple is watchlist, not v1 constituent. Download

SUB Starter portfolio ExcelAvailable to subscribers: implementation-ready sizing for a model allocation. Request implementation files

SUB Backtest CSVAvailable to subscribers: daily index levels for analysis and charting. Request implementation files

SUB Monthly update templateAvailable to subscribers: rebalance commentary, watchlist notes, and implementation cadence. Join the update list