The trading and investing platform, eToro has joined forces with Bridgewise, a generative AI company that specializes in stock analysis. Together, they have introduced a portfolio that is designed to offer users an opportunity to invest in companies with the potential to outperform the market.
Dubbed Fundamental-AI, the portfolio is powered by Bridgewise's proprietary generative AI technology. It assesses 1,000 large companies on eToro based on a range of future performance predictors, including quarterly filings, earnings calls, and analysts research. Each company is assigned a numerical score that reflects its potential to outperform industry peers.
eToro's Fundamental AI for Stock Analysis
In an email sent to Finance Magnates, Dani Brinker, the Head of Investment Portfolios at eToro, said: "Fundamental analysis serves as the cornerstone of stock valuation and has traditionally been time-consuming for individual investors. However, AI changes the game as it can quickly handle vast amounts of data from anywhere in the world, in any language."
Comprising 40 selected stocks across various industries and regions, Fundamental-AI has a monthly rebalancing strategy to ensure its holdings remain aligned with market conditions. Notably, the assets within the portfolio are offered as Contracts for Differences (CFDs), encompassing both long and short positions.
Gaby Diamant, the CEO and Co-Founder at Bridgewise, shared his enthusiasm for the venture as he stated: "Analysing data with AI has the potential to offer more diversified opportunities compared to traditional stock picking. We are excited to put our proprietary technology to use and give eToro access to machine learning models to help process enormous amounts of market information."
Global Expansion and Valuation Challenges
Headquartered in Israel, eToro has established itself as one of the top retail brokers, offering a range of trading instruments, including stocks, cryptocurrencies , and contracts for differences (CFDs). With a global presence, the company operates under licenses in multiple jurisdictions, including the US, the United Kingdom, Australia, Cyprus, and Abu Dhabi.
In July, the Bank of Spain officially registered eToro as a virtual asset exchange and electronic wallet custody service provider. eToro's registration in Spain came in the wake of the company's efforts to bolster its brand through sports sponsorship by becoming the official sponsor of the Spanish basketball club, Baskonia.
However, the company witnessed a sharp decline in its valuation last month. According to a report by Finance Magnates, eToro's shares traded at USD $60 per share in August, causing the company's valuation to plummet 35 to 40% to USD $1.7 billion. The previous official valuation for eToro was USD $2.5 billion.
