AI-Powered Investing Assistant - Revolutionizing Stock Analysis Part 1
People & Blogs
Introduction
In this article, we will explore the creation of an AI-powered investing assistant designed to perform financial analysis and answer questions about stocks efficiently. Financial and qualitative analyses are essential for making informed investment decisions, yet the research can be complex, time-consuming, and often requires expertise that not every investor possesses. Our AI investing assistant aims to simplify this process by allowing users to ask natural language questions about a company's finances and quickly fetch relevant data for analysis.
Demo Overview
Let’s walk through a demo of the investing assistant. The user interface allows users to enter a stock symbol, and for this example, we will begin with Microsoft, symbolized as MSFT. Upon submission, the assistant immediately downloads all historical financial data for Microsoft.
Once the data has been retrieved, users can ask various questions. For instance, one might inquire about the percentage change in revenue for Microsoft in the most recent fiscal year. The assistant efficiently processes this request, responds with the figures for fiscal 2023 and 2022, indicating a 6.88% increase from $ 198 billion to $ 21 billion. This information can be verified against Microsoft's actual financial data.
Next, users may pose more complex questions. For example, asking the assistant to evaluate trends in operating profit margins over the last three fiscal years prompts it to gather the necessary information. The assistant summarizes the data, indicating a slight upward trend in operating profit margins.
The assistant can tackle even more sophisticated queries. For example, requesting an analysis of financial performance over the last five fiscal years concerning revenue growth, operating income, EPS growth, margins, profitability, and balance sheet health results in a thorough assessment. Although this takes more time, the assistant concludes that Microsoft shows a steady increase in revenue, operating income, and earnings per share while maintaining profitability and a healthy balance sheet.
When we switch to Peloton, symbol PTON, and ask the same complex question, the assistant's findings reveal a mixed performance trend. It points out an increase in revenue, a decrease in 2022, and ongoing negative operating income. The conclusion emphasizes that while revenue and assets have shown some growth over five years, profitability and overall balance sheet health are deteriorating. This type of analysis is invaluable for investors assessing company performance for investment decisions.
The Technology Behind the Assistant
At the heart of this investment assistant are OpenAI's GPT models, but several challenges prevent them from functioning optimally on their own. The first significant hurdle is the potential for "hallucinations," which are outputs that may appear credible but are misleading or incorrect. Such inaccuracies lower one's confidence in the assistant's responses.
The second limitation is the necessity for up-to-date information. Since GPT's knowledge base cuts off at September 2021, it lacks current financial data. To overcome these obstacles, we are incorporating our own data sources. By starting with the user's question and sourcing relevant data, we can feed this data alongside the question into GPT. This allows us to leverage GPT's capabilities in generating natural language responses, while still controlling the accuracy of the data used.
Future Enhancements
Over the next several articles, we will dive into the inner workings of the AI investment assistant, including detailed descriptions and code walkthroughs. We will explore ways to enhance the system further, focusing on prompt engineering, fine-tuning capabilities, and incorporating additional data sources such as conference calls and press releases for a broader range of inquiries.
These advancements promise to augment the investment research process and lead to better-informed decisions. As we consider the power of AI technologies, it becomes clear how they can significantly enhance human capabilities across various sectors, including finance and investing.
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Keywords
- AI Investing Assistant
- Financial Analysis
- Microsoft (MSFT)
- Peloton (PTON)
- Revenue Change
- Operating Profit Margins
- Financial Performance
- Up-to-date Information
- Natural Language Processing
FAQ
Q: What is an AI investing assistant?
A: An AI investing assistant is a tool that uses artificial intelligence to analyze financial data and answer user queries about stock performances.
Q: How does the assistant provide accurate financial information?
A: The assistant retrieves up-to-date financial data based on user questions and feeds this information into AI models like GPT to generate accurate answers.
Q: What are the main challenges with using GPT for financial queries?
A: The primary challenges include potential hallucinations (misleading outputs) and the lack of current knowledge, as GPT's information is only up to September 2021.
Q: What types of analysis can the AI assistant perform?
A: The assistant can perform various types of analyses, including revenue trends, profit margins, financial performance assessments, and balance sheet evaluations.
Q: How will future improvements enhance the assistant's capabilities?
A: Future improvements will include advanced prompt engineering, the integration of additional real-time data sources, and enhanced ability to answer complex financial questions.
