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3 Artificial Intelligence Stocks Leading the New Wave

#artificialintelligence

Everyone is talking about artificial intelligence (AI) right now- with many predicting that AI will lead the next wave of economic growth and productivity for the next couple of decades at least. AI refers to the use of data to simulate human intelligence processes including learning, reasoning and self-correction by machines. AI is making its way into almost every industry. With IDC predicting that worldwide spending on AI will be nearly $98 Billion in 2023, the implications of this technology are massive. And this has not been ignored by Wall Street.


Nikkei posts sharp 521-point rebound after Wall Street surge

The Japan Times

Tokyo stocks turned sharply higher Monday as sentiment improved thanks to continued advances on Wall Street. The Nikkei average of 225 selected issues on the first section of the Tokyo Stock Exchange soared 521.22 points, or 2.71 percent, to end at 19,783.22, The Topix index of all first-section issues closed up 25.96 points, or 1.83 percent, at 1,447.25. It lost 4.69 points the previous trading day. From the outset, market participants rushed to buy so-called cyclical stocks vulnerable to economic conditions, particularly technology issues such as industrial robot producer Fanuc and chip-testing device manufacturer Advantest.


Robot Analysts Outwit Humans on Investment Picks, Study Shows

#artificialintelligence

They beat us at chess and trivia, supplant jobs by the thousands, and are about to be let loose on highways and roads as chauffeurs and couriers. Now, fresh signs of robot supremacy are emerging on Wall Street in the form of machine stock analysts that make more profitable investment choices than humans. At least, that's the upshot of one of the first studies of the subject, whose preliminary results were released in January. Buy recommendations peddled by robo-analysts, which supposedly mimic what traditional equity research departments do but faster and at lower costs, outperform their flesh-and-blood counterparts over the long run, according to Indiana University professors. "Using this type of technology to make investment recommendations or to conduct investment analyses is going to become increasingly important," Kenneth Merkley, an associate professor of accounting and one of the authors, said by phone.


Robot analysts outwit humans on investment picks over long run, study shows

The Japan Times

They beat us at chess and trivia, supplant jobs by the thousands, and are about to be let loose on highways and roads as chauffeurs and couriers. Now, fresh signs of robot supremacy are emerging on Wall Street in the form of machine stock analysts that make more profitable investment choices than humans. At least that's the upshot of one of the first studies of the subject, whose preliminary results were released in January. Buy recommendations peddled by robo-analysts, which supposedly mimic what traditional equity research departments do but faster and at lower cost, outperform their flesh-and-blood counterparts over the long run, according to Indiana University professors. "Using this type of technology to make investment recommendations or to conduct investment analyses is going to become increasingly important," Kenneth Merkley, an associate professor of accounting and one of the authors, said by phone.


Robot-analysts make BETTER stock recommendations than human investors, study finds

Daily Mail - Science & tech

Robots are said to take over some 200,000 jobs on Wall Street over the next decade and a new study suggests this prediction could soon become a reality. Following the analysis of 76,000 reports from seven different robo-analysis firms, researchers determined that the technology is able to make recommendations similar to their human counterparts - but faster and more accurately. Because the automation is less subject to behavioral biases and conflicts of interest, it can produce a more balanced distribution of ratings, which includes investment's risk and suggestions whether to hold, sell or purchase. Looking at the robot portfolios, the study found their buy recommendations earned returns from 6.4 percent to 6.9 percent, while those of its human counterparts only ranged from 1.2 percent to 1.7 percent. Although robo-analysis sounds like it could weed out human investors, researchers believe that as long as there are people that need human interaction, 'the buy-side, the sell-side will still be around.'


Artificial Intelligence on Wall Street Will Be Great, Until It Isn't

#artificialintelligence

Until recently, artificial intelligence has struggled to gain a foothold on Wall Street. In the last few years, large investment banks like Goldman Sachs and JP Morgan have hired artificial intelligence specialists away from academia and put them in charge of their internal AI divisions. Financial technology start-ups have begun using machine-learning algorithms to model credit ratings and detect fraud. And hedge funds and high-frequency traders are using AI to make investment decisions. Politicians are starting to take notice.


Opinion: Why we should be worried about artificial intelligence on Wall Street

#artificialintelligence

Until recently, artificial intelligence has struggled to gain a foothold on Wall Street. In the last few years, large investment banks like Goldman Sachs and JP Morgan have hired artificial intelligence specialists away from academia and put them in charge of their internal AI divisions. Financial technology start-ups have begun using machine-learning algorithms to model credit ratings and detect fraud. And hedge funds and high-frequency traders are using AI to make investment decisions. Politicians are starting to take notice.


Can Robots Replace Day Traders on Wall Street? Finance Magnates

#artificialintelligence

Some 9,000 people, about one-third of Goldman's staff, are computer engineers." Artificial Intelligence is causing massive paradigm shifts across many industries, but its biggest impacts is felt in financial services sector. Simply put, artificial intelligence provides unfair advantage in the financial markets. Nonetheless, AI has limited capability as exemplified in the chess game between Russian chess grandmaster and IBM Deep Blue computer. This piece provides insight into why algorithm trading won't necessarily render human traders useless on Wall Street. In recent years, technology has made it possible to'teach' computers how to trade. Yet day traders continue to remain an integral part of the stock trading markets globally. Apart from specialist niche trading sections where corporations engage in high frequency trading, day trading by robots fails time and time again. But the stock markets behavior constantly changes. Savvy traders can adjust themselves to changes, while adjusting algorithms is too expensive, and time consuming. For that reason and others, day traders still do a better job than any day trading algorithm. Computers are facilitating many of the trades happening on the floor of exchanges globally; yet, the actual task of the algorithms is often limited to analyzing and predicting market trends. The final decision to buy or sell an asset is still often determined by a human. In some instances, the human hits the buy/sell button and in most instances, the human instructs the algorithm to buy X when the price/profit/loss reaches a certain threshold or sell Y when certain parameters are met. Interestingly, Meir Barak, author of The Market Whisperer: A New Approach to Stock Tradingand founder of Tradenet observes that there will always be a place for human traders because the stock market is fluid and dynamic. The fact that humans don't consistently act rationally suggests that computers won't necessarily be adept in the face unexpected market performance. "Let's say a chess grandmaster plays against the best computer in the world.


Uber aims for stock market debut value of more than $90bn

The Guardian

Uber has unveiled the terms of a hotly anticipated stock market float which it hopes will value the ride-hailing service at more than $91bn (£70bn). While the target is $10bn less than some bankers suggested the 10-year-old firm might be worth, the valuation is more than double the value of the 116-year-old carmaker Ford and would be the largest float by a US tech company since Facebook's in 2012. Its Wall Street debut will gauge investors' excitement about the prospects of a company that has expanded rapidly from taxi services into food delivery and is now investing billions in developing driverless cars. If it hits the mark, Uber will raise around $9bn in new funds and some early investors will make big profits. Despite the scale of ts ambition, Uber lost $1.8bn last year even while its revenues surged by more than 40% to $11.3bn.


How to Survive Wall Street's Robot Revolution

#artificialintelligence

Wall Street's robot revolution has begun. JPMorgan Chase & Co. is rolling out a program called LOXM that executes equities trades so well, it's replacing the humans who used to do that. Goldman Sachs is in the midst of automating the initial public offering process. Innovations in financial technology -- fintech -- are creating competition in fields long dominated by the institutions. Vikram Pandit, who ran Citigroup Inc. during the financial crisis, says technological advances could make 30 percent of banking jobs disappear in five years.