Can AI Replace Stock Analysts? Evidence from Deep Learning Financial Statements (2024)

FAQs

Are financial analysts going to be replaced by AI? ›

AI will not replace financial analysts, but it may reduce the number of such professionals as they become more efficient, effective, and reliable by using AI, machine learning, and other transformative technologies.

Overall, the results of this research support the notion that AI has the potential to replace human analysts in certain aspects of predicting financial performance.

AI models can analyze the historical market data and volatility that could affect returns and adjust portfolios in real-time to align with changing market conditions. Besides this, AI-driven algorithms improve overall portfolio performance by suggesting diversification strategies to mitigate potential risk.

Q1: Can AI fully replace Data Analysts? Answer: While AI can automate certain tasks traditionally performed by Data Analysts, such as data cleaning and preliminary analysis, it is unlikely to fully replace the need for human analysts.

The superior accuracy of ChatGPT's forecasts can be attributed to its ability to correct the optimistic biases inherent in human analysts' forecasts. We consider that LLM applications such as ChatGPT are not meant to fundamentally replace human financial analysts.

Jobs that rely heavily on human skills like creativity, empathy, and complex problem-solving will likely remain relatively safe from AI automation for the foreseeable future. Roles that focus on augmenting or overseeing AI systems are also less prone to replacement by machines.

The results were telling. With the step-by-step prompts, GPT-4 achieved a prediction accuracy of 60.35 per cent, significantly higher than the 52.71 per cent accuracy of human analysts. Moreover, GPT-4's F1-score, which balances the accuracy and relevance of predictions, also outperformed that of the human analysts.

AI can automate certain aspects of stock trading, analyzing data and executing predefined strategies. However, the success of AI in trading depends on various factors, and it cannot completely replace manual trading.

The reason is because it doesn't work. A neural network can't predict what the stock market is going to do just by looking at its history. There are forces way larger than "what it was before" that affect it.

Is it illegal to use AI to trade stocks? ›

Using artificial intelligence to guide trading strategy and execute trades is perfectly legal under U.S. and international law.

Not to mention, human financial analysts bring creativity and critical thinking AI doesn't tend to possess. So, it is unlikely that AI will fully replace financial analysts, or at least any time in the near future. Instead, they may work together to improve efficiency and accuracy in decision-making processes.

No, ChatGPT and similar natural language processing models are not designed to replace data analysts. While these models can assist with certain tasks related to natural language understanding, they lack the specialized skills, domain knowledge, and analytical abilities that human data analysts bring to the table.

AI is unlikely to completely replace finance jobs, but it will significantly impact the field. Here's a breakdown of how AI will likely transform finance professions: Tasks replaced by AI: Repetitive tasks: AI excels at automating repetitive tasks like data entry, bookkeeping, and basic financial analysis.

Could Business Analysis Be Automated? There's no need to panic – the Business Analyst role isn't going anywhere anytime soon! Business analysis involves a lot of critical thinking, emotional and social intelligence, and complex communications and discussions among multiple parties.

AI can help make financial modeling and forecasting much quicker and easier, allowing you to make adjustments on the fly, use natural language to build complex reports and even have AI identify trends, risks and opportunities that you might miss.

To put it simply, AI will not fully replace human researchers. The relationship between AI and humans is less about competition and more about collaboration. As we delve into this topic, it's crucial to understand that AI's role is to augment and support human efforts, not to render them obsolete.