Data in Financial Analysis and the Use of AI

Rhodri Preece, Senior Head of Research, CFA Institute, says emerging technologies can help investment professionals draw insights from unstructured ESG data.

Data is being generated at an exponential rate, and the technology powering the algorithms used to parse it is growing just as fast, opening up both new opportunities for investing and innovative ways to leverage alternative data. Investment professionals are now navigating a landscape supplemented by unstructured, alternative, and open-source data. A survey on alternative and unstructured data conducted by CFA Institute in July 2023 revealed that more than half of investment professionals are incorporating unstructured data into their workflow, and 64% indicated using alternative data. This shift has prompted a reevaluation of analytical methodologies and frameworks within the industry.

Over the past few decades, the predominant approach to financial analysis has centered on leveraging structured, numerical data. As the digital revolution continued, new alternative data providers sprouted up, capitalising on the notion of data being the ‘new oil’. The exponential growth of unstructured data boosted demand for methods to process and extract valuable insights, leading data science to emerge as a highly sought-after domain of expertise within investment firms.

Understanding data in financial analysis

The first level of distinction in defining the data used in investment decision-making processes is understanding the various generators of the data, which include companies, governments, individuals, and satellites and sensors.

Company data include, for example, financial statements, operational metrics, strategic plans, and data that arise when individuals or entities interact with the company’s products and services. Examples of such interaction data include credit card transactions, app download statistics, and email receipts. Government data include economic statistics on the health, performance, and status of a country’s economy, while government interaction data include data that are generated from the day-to-day functions of government activities, including business permits, patents granted, and public service usage, such as transport ridership and facility utilisation. Individuals generate data through their online activities, such as social media engagement, consumer reviews, and search engine queries. Lastly, technologies such as satellites and sensors generate data in the form of geolocation information, satellite imagery, and internet of things (IoT) devices, like manufacturing equipment usage patterns.

The second level of distinction is the type of data, which refers to whether the data is traditional or non-traditional. Non-traditional or alternative data is defined as any data that differs from traditional investment sources, such as financial statements,

Charted: How Many Data Centers do Major Big Tech Companies Have?

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June 4, 2024 Graphics/Design:

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How Many Data Centers do Major Big Tech Companies Have?

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The Big Tech companies are often compared against each other in many ways: how much money they make, market capitalization, and the newest flavor, generative AI capabilities.

But in their great strides to capture the digital realm, how many huge data facilities do they need for all their services, analytics, and storage?

Sourcing information from Meta, Google, Microsoft, and some third-party estimates for Apple and Amazon, we find out.

Ranked: Big Tech’s Data Facilities

Cloud computing giants—Microsoft and Amazon—have data centers in the triple-digits to accommodate their customers’ burgeoning business demands.

However, there’s no one standard of how big a data center needs to be, so quantity doesn’t automatically translate into greater capacity.

Big Tech CompanyData Centers Microsoft**300 AWS*215 Google25 Meta24 Apple*10
Note: *Third-party estimates vary depending on the source. AWS is usually listed between 160–220 and Apple from 8–10. **Microsoft lists their count as “300+.”

According to Statista, AWS still maintains the biggest market share in the cloud computing segment (31%) even as Microsoft Azure edges ever closer (25%).

In fact, Amazon is aiming to spend $150 billion on more facilities over the next 15 years. Estimates say 26 data centers are currently under construction. All of this, of course, to chase the AI boom.

Despite dominating our digital lives however, Big Tech aren’t the only players when it comes to data center metrics. For example, Digital Realty, a colocation data center provider, would rank alongside Microsoft with 300+ data facilities.

Learn More about Big Tech and AI from Visual Capitalist

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