As AI becomes more deeply integrated into fundamental investing, where does human judgment still provide an edge?

In this episode of Invest with AI, Brett Caughran and Alistair Smallwood, Head of Applied AI at Primer, discuss how artificial intelligence is reshaping equity research, alpha generation, and the future of fundamental investing.

"And I think there'll be a real opportunity for the sharpest people in fundamental investing that really understand AI systems to identify over and under-reactions in the short term of stocks in sectors that they know really well." - Alistair Smallwood

From systematizing mosaic theory and identifying investment signals to automating earnings forecasts, AI is transforming how fundamental investors conduct research. But as these systems become more widely adopted, they could also introduce new biases, market mispricings, and opportunities for investors who think a step beyond the data.

As AI becomes more capable of replicating traditional investment research, the question is no longer just what these systems can do, but how investors can use them to gain a competitive edge.

Watch the full conversation to hear where Brett and Alistair believe the next opportunities for alpha could emerge.

Timestamps:

00:00 — Introduction
00:27 — Alistair's Background: From Investing to Applied AI
03:08 — The Evolution of AI in Equity Research
06:54 — Building AI Systems That Adapt to New Models
08:46 — Mosaic Theory and the Future of Investment Research
11:50 — Scaling Mosaic Theory with AI
17:02 — Can AI Replicate Human Investment Research?
19:51 — The Future of AI Skills and Autonomous Research
22:38 — Evaluating AI Output in Fundamental Investing
24:10 — How AI Could Reshape Alpha Generation
27:38 — AI Bias and Potential Market Mispricings
30:44 — AI-Generated Earnings Forecasts and Market Expectations
33:00 — The Limitations of AI Benchmarks
37:07 — Where Human Judgment Still Matters
42:19 — AI's Impact on Investment Horizons
47:02 — The Future of Factors and Risk Models
48:07 — The AI Skills Gap Across Hedge Funds
50:31 — Why Fully Autonomous Investing Remains Challenging
56:09 — Finding Alpha Beyond First-Order AI Insights
57:54 — The Risks of Misinterpreting Alternative Data
59:36 — Building and Scaling Primer
1:03:36 — AI Adoption, Compliance, and Data Security
1:06:58 — The Future of AI Adoption in Investment Firms

Explore more episodes of Invest with AI:
https://www.fundamentedge.com/invest-with-ai

Want to up-level your investing style? Learn more at Fundamental Edge: https://www.fundamentedge.com