Experts from the international Forex broker OctaFX have embarked on a quest to discover how AI’s already emerging, tremendous, and disruptive potential is impacting investment opportunities.
At Google’s recent annual presentation, an announcement was made which might signal a grand stepping stone for what some consider the next major chapter of the ‘Fourth Industrial Revolution’.
Google (NASDAQ:GOOGL) has initiated a comprehensive, full-scale integration of artificial intelligence into all of its products and services. Artificial intelligence (AI) is revolutionizing industries by offering simplified, faster, and more cost-effective solutions. The use of computers to mimic human intelligence provides a competitive advantage that not only ordinary people but many public companies want to take advantage of.
Combine that with the fact that Microsoft (NASDAQ:MSFT) has begun a strategic partnership with the digital advertiser Perion Network (NASDAQ:PERI) for its AI-powered search engine Bing. Moreover, the tech giant recently integrated ChatGPT into its search engine, investing billions of dollars in the process. You'll realize that AI is the future—and it's here.
What are text-based AI and ChatGPT?
ChatGPT, developed by OpenAI and released in November 2022, is the newest and most advanced system transforming the work and sharing technologies of the future.
One of the latest revolutionaries in technology and communications, ChatGPT may reach into exams, medical licensing, or university programs, so entrepreneurs, businesses, and industries are experimenting with this new technology. With its ability to streamline communication and interact in conversations, ChatGPT performs various actions from writing to coding. It provides dialogue formats that allow complex topics to be explained, suggests additional questions, acknowledges mistakes, and rejects inappropriate requests.
According to Elon Musk, ‘ChatGPT is pretty darn good. We're not far from dangerously strong AI.’ And while ChatGPT is not foolproof, it is already causing a stir in the stock market as investors are eager to see how viable this investment will be.
Is there a light at the end of the tunnel?
For every IT multi-billionaire painting a 'doom and gloom' picture, there are a dozen—if not more—highly enthusiastic about artificial intelligence taking over the world economy and everyday life.
Maybe not as outspoken as Elon Musk in his tweet, but enthusiastic nonetheless: Microsoft is entering into a strategic partnership with the owner of ChatGPT (OpenAI) and integrating them into its search engine, Bing. Although Microsoft's Bing is far behind Google and occupies only 3% of the global search market, the integration of AI could significantly impact the balance of power in this segment.
In fact, most inhabitants of the IT industry and its influencers labor in great anticipation of AI’s great entrance onto the world stage.
In addition to the software and coding companies, the hardware segment is also growing since AI in IT corporations' service needs high-performance servers and storage solutions. For example, the shares of Super Micro Computer (NASDAQ:SMCI), Inc. [NASDAQ: SMCI] have risen more than 200% in the last year.
We see that technology companies appreciate these solutions, and investors are capitalizing on the growth of their stock. By the way, AI is also actively used by investment banks.
JPMorgan (NYSE:JPM), for example, uses artificial intelligence trading software, which utilizes machine learning applied to billions of historical trades to outperform human traders. Reinforcement learning techniques can even optimize the behavior of other market participants responding to automated trading strategies. And as recent research shows, 68% of investment houses use AI decision-support tools in asset management organizations.
Overall, it's clear that artificial intelligence is playing an important role in this area.
The OctaFX financial expert Kar Yong Ang reiterated this principle: ‘AI applications are on the rise that identifies complex trading patterns on a grand scale and across multiple markets—in real-time. What this means is, a synergy between rapid big data processing solutions and advanced machine learning technology is utilized to tackle the following: manual error risk reduction, smart entry automation, market impact reductions, and position exits.’
Some advanced start-ups even began utilizing AI to bring about quantitative trading strategies and price forecasts for the crypto domain.
Other fintech players concentrate on integrating AI into novel search platforms that gather intelligence from extensive libraries of private and public sources, including SEC data, industry-relevant insider publications, or transcripts of earnings calls. These industry-specific search engines can then be personalized to suit the specific portfolio needs and the overall profile of the investing or trading client.
So designing and implementing a trading strategy manually and with organic (human) cognitive skills was yesterday. Nowadays, any private investor can save time and resources simply by sending a query to the AI to search for information, which in three to four iterations, will find the stocks with the greatest upside potential, tailored to each user.
Viral growth potential
The studies on this topic are literally overflowing with references and analytical forecasts on AI's significant growth potential. It is a market of its own that is already stretching like a tent over most other markets. This development has begun to attract software companies across the board, including video game developers, blockchain projects, Business Intelligence (BI) providers, online dating, ad targeting, and the different AI stock trading bots alluded to above—to just name a few. A general rule of thumb: the stocks of any serious hardware and software product companies that pledged to implement AI into their products deeply are promising candidates for personal investment.
This time, it’s no cliché—the future is, in fact, now
The potential returns on mid- and long-term investments in this emerging tech phenomenon are huge, mostly still untapped, and the niche is not yet as occupied as it probably should be.
Google’s latest decision to an all-encompassing deployment of AI into its services has been the trigger for democratization: once, only huge investment funds were privileged to apply AI to analyze and interpret data for financial gain—soon, anyone with a smart device will be able to do just that.
Regardless of the personal, social, and political impact of an AI-powered world economy and civilization—for better or for worse—the fact remains: individuals who decide to invest in AI technology today will soon discover that they have become part of something historically unique—with the corresponding gains and returns.
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OctaFX is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and a variety of services already utilized by clients from 180 countries with more than 40 million trading accounts. Free educational webinars, articles, and analytical tools they provide help clients reach their investment goals.
The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.
OctaFX has also won over 60 awards since its foundation, including the ‘Best Online Broker Global 2022’ award from World Business Outlook and the ‘Best Global Broker Asia 2022’ award from International Business Magazine.