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Jeff Kagan: How AI helps investors with stock analysis and selection

By: Equities.com

March 12, 2025 at 10:49 AM EDT

Jeff Kagan: How AI helps investors with stock analysis and selection

Artificial intelligence is a remarkable technology that is moving into many new industries and taking them to the next level. In each industry, there are always a few early adopters who transform the entire space first. These are the trailblazers. Next, everyone else follows down the new path.

Being first to market gives a competitive advantage early on. Then everyone eventually catches up. That’s the reason some companies want to be first to market.

Today, AI is playing an increasing role in changing the way industries operate. Not only is this technology changing entire industries, but it is speeding things up and going deeper, making these more valuable than ever before. I believe this will not only continue but accelerate.

RedChip and AI analysis

I discovered RedChip Companies while doing research into how AI is transforming industries we have used forever. RedChip is an Inc. 5000 company. It focuses on the microcap and small-cap market over the past three decades.

Dave Gentry is the CEO of RedChip Companies, and during a recent conversation he filled me in on the size and scope of this new AI service and the future of the industry.

RedChip created a new service within the past few months called RedChat, which is an AI service that helps investors analyze, purchase and manage their small-cap investments. Now with AI, they are focused on taking their investing business to the next level. This is a new growth track in addition to the more traditional track.

Expect to see many companies start to use AI to transform their industry, just like RedChip is doing with RedChat.

AI will impact investment management

I see this being an important area for AI to expand into. That is why I expect to see others in the industry move in this same direction going forward. AI is an invaluable tool with regards to investment management. It has the ability to quickly automate data collection and analysis, more accurately than doing so on our own.

One of many key benefits is AI has the ability to use computer algorithms. This helps investment managers gather and process enormous amounts of raw data. This data comes from numerous different sources including statements, the media, press releases, market data and more.

The role of AI in investing is it discovers insights with data analytics, forecasting, measurement and more. It does the hard work of research and presents recommendation for stocks to buy, hold or sell. So, in this case AI is improving and transforming investment strategies.

Benefits of using AI for investment strategy

The results are not generic. They are focused on the person asking the questions. It is focused on you. Worked into the formula are your preferences and goals. Your risk tolerance, marketplace trends, the direction of industries and individual companies.

So AI not only helps to speed-up the investment research process, but it also aids with risk management and tolerance, reduced emotional input, accurate diversification, continual monitoring of the balance of your investments and much more. T

he human mind can get overwhelmed. AI can find variations that human beings miss. Machine learning is good at that. It helps with more accurate and timely management of your investments.

As AI advances, more become adopters

While this all sounds brand new, the fact of the matter is AI has been with us in various stages and levels for many decades. In fact, we have all been using a variety of AI in our lives for many years.

Now, as artificial intelligence technology continues to advance to new levels, it is becoming viable for many industries and companies, large and small to jump in with transformational new technologies, ideas and thinking.

Going forward, I see this transformation accelerating. In fact, I see AI being in the early stages of an enormous and long-term growth wave in industry after industry. The question is, will you be an early adopter or will you wait and be a follower?

More Jeff Kagan: The next IBM growth wave

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Jeff Kagan: How AI helps investors with stock analysis and selection

RedChip and AI analysis

AI will impact investment management

Benefits of using AI for investment strategy

As AI advances, more become adopters

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