Did you know you can now get a complete stock market summary in just seconds? You no longer have to spend hours reading lengthy reports or scrolling endlessly through financial news. With AI tools like ChatGPT, you can quickly conduct fundamental analysis, technical analysis, market sentiment tracking, and even find undervalued stocks — all in a streamlined way.

Here’s a complete step-by-step guide to mastering stock analysis using AI.

Step 1: Conduct a Fundamental Analysis

Fundamental analysis helps determine if a stock is worth buying by evaluating the company’s strength and profitability. It focuses on the real value of the business based on its financial health.

To perform a fundamental analysis:

• Use a prepared prompt to guide ChatGPT.

• Input the company’s name and the stock exchange.

For example, analyzing TCS (Tata Consultancy Services) on the National Stock Exchange (NSE) reveals:

• Revenue Growth: TCS achieved a 7.7% growth in the recent financial year and a 2.3% quarter-over-quarter increase.

• Earnings Per Share (EPS): High EPS reflects a more profitable company. TCS has a strong EPS record.

• Debt-Free Status: TCS has remained debt-free for the past five years, indicating financial stability.

• Valuation Metrics:

  • P/E Ratio: At 28.04, TCS’s Price-to-Earnings ratio is higher than its competitors (Infosys, HCL, Wipro), suggesting it is potentially overpriced but reflects strong growth expectations.

  • P/B Ratio: A P/B ratio of 12.49, higher than peers, indicates investor confidence in TCS’s future value.

• Dividends: TCS paid ₹28 per share last year, a healthy return for IT sector investors.

• Growth Investments: TCS’s investment in emerging technologies like AI and cloud computing signals ongoing growth.

• Risk Analysis: Despite being financially stable, TCS could be impacted by global economic fluctuations.

• Investment Outlook: The stock is generally bullish due to strategic investments, innovation focus, and strong leadership.

Step 2: Analyze Using Legendary Investors’ Principles

Applying investment principles from experts like Warren Buffett can further validate the stock’s strength:

• TCS meets most of Buffett’s investment criteria, including strong cash flow and competitive advantages.

• However, its high valuation currently might make it less attractive based on “value investing” philosophies.

You can customize this method using other investors’ strategies too.

Step 3: Conduct a Technical Analysis

Technical analysis predicts future price movements based on past data and chart patterns. Using a chart of daily stock movements for the past few years, ChatGPT can provide:

• Current Price Trends: For TCS, the highest recent stock price was ₹4600, but it has been declining since.

• Trend Analysis: The stock currently shows a bearish trend.

• Forecast: Unless the stock price rises above ₹4000, the downward trend might continue.

Technical analysis gives valuable insights for short-term and medium-term trading decisions.

Step 4: Perform a Sentiment Analysis

Sentiment analysis collects and evaluates the latest news and updates to predict stock performance based on public sentiment:

• Positive News:

  • Partnership with Salesforce for AI initiatives.

  • Recognition as a top employer and one of the world’s most admired companies.

• Negative News:

  • Legal challenges related to visa policies.

  • Changes in attendance policy creating internal unease.

• Stock Performance:

  • A potential 16% drop forecast based on technical patterns.

Overall, TCS’s sentiment is currently neutral to slightly negative. Staying updated with daily news is crucial for smart investing.

Step 5: Get Daily Stock News and Summaries

Instead of searching for updates manually, you can set up AI alerts:

• Receive daily stock performance summaries.

• Stay informed about sector-specific trends like fluctuations in pharmaceutical, automobile, and IT stocks.

This continuous flow of information ensures investors never miss important market shifts.

Step 6: Use ChatGPT as a Stock Screener

Stock screening filters stocks based on specific criteria, helping find the best investment opportunities. For example:

• Search for undervalued stocks based on low P/E and P/B ratios and strong financials.

• Focus on industries with steady long-term growth prospects.

This method follows the approach of legendary investors like Warren Buffett and Benjamin Graham, who prioritized undervalued stocks to minimize risk and maximize returns.

Conclusion

Using AI tools like ChatGPT, anyone can quickly and accurately perform in-depth stock analysis — from fundamental evaluation and technical trend forecasting to sentiment tracking and stock screening. This efficient and powerful approach helps both beginners and seasoned investors make smarter decisions, saving valuable time while improving investment outcomes.

By mastering these steps, you can transform your stock research process and stay ahead in the ever-changing world of investments.