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Apple Puts AI in Your Pocket, but Can It Tell You Which Stocks to Buy?

Published 2024/06/13, 13:26

This week's stock market frenzy wasn't just about the Fed meeting. Apple (NASDAQ:AAPL) fueled a stock market rally with its announcements about integrating AI into its devices.

The excitement began Tuesday with the unveiling of "Apple Intelligence," their proprietary AI system. Investors cheered even louder when Apple revealed its devices would also tap into OpenAI's ChatGPT, accessible through Siri.

This news sparked a surge in Apple's share price. On Tuesday, it jumped over 7%, gaining momentum with a near 3% increase on Wednesday. The stock reached new all-time highs, both intraday at $220.20 and closing at $213.07.

The rally even briefly pushed Apple back to the top spot as the world's most valuable company, though it ended the day neck-and-neck with Microsoft (NASDAQ:MSFT) for second place.

Integrating AI into Apple devices ushers in a new era

However, beyond boosting Apple shares and fueling the "AI rally", Apple's announcements also mark the beginning of the acceleration of AI integration into everyday life, literally putting the technology in the palm of the general public's hand.

This is especially true as Apple is generally a trendsetter, and we can expect AI to make an appearance on competitors' devices too.

Over the next few months, we can expect to be able to use AI to reply to messages, manage notifications, and perform tasks on various applications, opening up almost infinite possibilities.

However, there are still many areas in which generalist AIs such as Apple's or OpenAI's are not competent, because they don't have access to reliable enough data for certain specific tasks, or simply because they weren't designed for certain complex tasks.

Why can't AIs like ChatGPT give good stock market advice?

This is particularly true for stock market investing. Ever since ChatGPT was revealed to the general public, many people have tried to get stock market advice from it on which stocks to buy.

However, they soon came up against the reality (at the cost of heavy losses!) that general-purpose AIs are simply not equipped to do this.

Indeed, for an AI to be competent in terms of investment, stock market advice, and stock selection, it needs access to vast and constantly updated data, both in terms of historical stock prices and financial and other data.

Without going into the technical details, investment AIs work by identifying correlations between certain metrics or groups of metrics and stock price trends.

The aim is to find recurring patterns that aren't necessarily obvious to the naked eye, and which enable high-potential stocks to be spotted before they start to take off, while constantly questioning themselves to keep up with day-to-day market changes.

However, this data is not readily available free of charge on the Internet, or at least not collected in a single database, nor organized in such a way that AIs can easily exploit it. What's more, AIs like ChatGPT don't have access to real-time market data.

Above all, generalist AIs aim to produce content, often simply regurgitated, and not to study the correlations between financial data and stock price movements.

Are there AIs specialized in investment and stock selection?

So attempting to use ChatGPT or other mainstream AI models for stock market advice or even simple investment assistance would be a dangerous decision. Indeed, the more specialized AIs are, the more effective they are at the task for which they were designed.

The problem is that we're still at the beginning of the AI revolution, and there are few truly specialized models available at the moment. As far as trading and investment are concerned, banks have their models, but they are by no means accessible to the general public.

What's more, even if you do have access to these models, you still need to know how to use them to obtain the specific information you need.

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  • Best value stocks: +948.7%
  • Midcap chart: +593.3%

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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.

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