Bull Market Blueprint’s Luke Davis says AI has become the market

Luke Davis keeps the sector screen of the S&P 500 open on one of his monitors, and what he sees there has settled his view of 2026. The tech sector fund is at new highs. Consumer discretionary, staples, industrials, financials, utilities and basic materials are flat or down over the past couple of months. “My view on AI is that AI is the market,” he said.

Davis is the Founder and Chief Market Strategist of Bull Market Blueprint, an investing education platform for entrepreneurs who manage their own capital, and he runs a multi-seven-figure portfolio of his own across equities, precious metals and crypto. He spoke with Ashton Addison for Crypto Coin Show in an interview recorded Monday (October 5), and the full conversation is on the Crypto Coin Show YouTube channel. The views below are his own, and the interview carried no opposing voice. Bull Market Blueprint sells memberships built on the portfolio framework he describes, so read his account of that framework as its seller’s.

The indexAI earnings are carrying the benchmark while other sectors stall

An investor who buys the index for diversification is buying a concentrated position, in Davis’s reading. “Essentially fifty percent of the ETF is tech and those tech companies are AI companies,” he said of the Vanguard S&P 500 ETF. Apart from a rotation into real-economy sectors in January and February, he said, AI has driven the market’s returns all year.

He traces the gap to earnings and to compute demand. AI tools have become smarter and consume far more tokens than they did a year ago, which uses more compute, and he does not think supply is anywhere close to meeting adoption. Capital follows. “And I think it’s just capital moving towards where the earnings is, which is in AI,” he said, explaining why small caps and other companies have struggled despite a healthy economy.

The beneficiaries reach past the labs. Davis listed the parts of the data center build-out most investors overlook: “You need air conditioning, you need cooling, you need special chemicals, you need materials.” He pointed to Caterpillar, whose construction equipment backlog grew as US data center building accelerated, and to the energy, electrification and cooling companies behind it. BlockWest tracks that layer in its AI stocks coverage.

The disruptionConsumer agents put financial incumbents on the losing side

Davis splits the AI market in two: the companies building and supplying compute, and the companies being disrupted. He sees financial services in the second group. He cited Muse, which he said launched two weeks ago as the first consumer agent most mainstream users have tried, and described agents that cancel redundant subscriptions or move a customer to a bank offering a better interest rate. When that happened, he said, financials and other sectors fell on disruption fears.

He expects the same pressure on retail, e-commerce and software as OpenAI and its rivals try to become everything apps for work. He described OpenAI’s always-on agent product, dots, as one example of an assistant that connects to a user’s email, Slack and other tools, removing the need to build a custom agent. The result, in his view, is wider dispersion between AI winners and the rest of the index, which matters to anyone covering AI in finance.

The labsFrontier labs are priced as hyper-growth, so Davis buys their suppliers

Asked whether OpenAI and Anthropic are overvalued next to Meta and Google, which earn far more revenue, Davis said private investors are pricing in growth that has not arrived yet. He argued the labs have reached in three years the kind of growth curves that took Meta and Google upwards of a decade. “They are the fastest growing companies in history,” he said. “I think that’s the first thing that everyone has to recognize, whether that’s sustainable or not, is a completely different discussion.”

He said OpenAI recently crossed a billion users, citing a podcast with the company’s head of ChatGPT. He calls the labs the most loved and hated companies in the world, and sees that as a point in their favour as investments. Even so, he holds no private exposure to either company and said so directly. His position sits with the companies the labs spend money with: chipmakers, memory names, supply chain companies and hyperscalers, several of which he said he bought this year at some of their lowest recent multiples. His verdict on the labs’ valuations waits for their listings. “Let’s see when they go public,” he said.

The allocationBitcoin and gold take the seat bonds used to hold

Davis’s portfolio design, which he calls the Bulletproof Portfolio, starts from the 60/40 split of modern portfolio theory and drops the 40. “We’re of the belief that bonds are not necessarily what you want to be invested in in the new macro and fiscal environment of the 2020s onwards,” he said. He noted that 2022 was a bad year for bonds, as is this one, and that during the market drop tied to the Iran and US conflict in March and April, cash was the only short-term safe haven.

In place of bonds he puts 50 to 60 percent in equities and the rest in scarce assets, weighted toward crypto for aggressive investors and toward gold and silver for conservative ones. He shortens it to businesses, bars and Bitcoin. The macro case is an AI transition that gets worse before it gets better. “I am of the belief that the world in 10 years from now, before it becomes better with AI, in some ways it gets more chaotic,” he said, a path he expects to run through unemployment and stimulus that lifts Bitcoin and gold.

He prefers to hold that exposure directly. Treasury companies such as Strategy (formerly MicroStrategy) and Bitmine may outperform the coins they hold, he said, but unless an investor cannot own the asset or a spot ETF, he would rather own spot in self-custody. He has made money on treasury company stocks and trades them as cyclical, thematic positions.

The BlockWest read. We think Davis’s most useful point for allocators is the first one: an index fund bought for diversification is now a concentrated AI position, and it should be sized that way. Swapping the bond sleeve for Bitcoin and gold is a bet that fiscal stress outlasts this cycle. That bet loses if yields fall and bonds rally, so it belongs in a portfolio as a position, not a default.

What to watchThe midterm window and the lab listings will test the thesis

Davis is watching the fourth quarter of a midterm year, which he called arguably the best quarter of the four-year presidential cycle, with a run known as the midterm miracle stretching into the first half of 2027. The US midterm elections on Tuesday, November 3, fall inside that window. Against it, he flagged rising yields and a strong dollar as a less supportive backdrop for Bitcoin. The longer test is an OpenAI or Anthropic listing, the point at which public markets would price the growth private investors are paying for now. More conversations like this one are collected on the BlockWest interviews page.

If Davis is right, the question for 2027 is not whether to own AI, but which side of the build-out an index fund has already put you on.