New Robot Analyst Slaps Sell Rating on Facebook and Google

  • Wells Fargo’s new bot analyst puts sell ratings on tech giants
  • Wall Street as a whole remains largely bullish on these firms

Sena Says AI Removes Bias From Securities Research

While human analysts are still overwhelmingly bullish on Alphabet Inc. and Facebook Inc., a new robot analyst at Wells Fargo says it’s time to sell. 

Late last month, Wells Fargo analyst Ken Sena introduced AIERA, short for artificially intelligent equity research analyst, a bot that does massive automated grunt work to support human analysts as they track stocks and make trade recommendations. And while analysts are known to skew toward buy ratings, the new bot doesn’t seem to share the bias.

“AIERA’s approach this week appears decidedly more conservative (than last week), as she places a ‘hold’ recommendation on 11 names and even going so far as to place Google and Facebook in the ‘sell’ category,” Sena says in a new note sent out to clients on Friday.

This is at odds with Wall Street’s outlook. Facebook, a stock that has climbed 48 percent this year, has 42 buys out of 47 ratings, according to data compiled by Bloomberg. Google parent Alphabet, up 24 percent in 2017, is similarly beloved, with 34 buys out of 41 ratings.

It’s also at odds with its inventors. AIERA’s pessimism isn’t enough to cause Sena and his team to remove their own outperform rating on both stocks.

“Of course, we would reiterate that AIERA remains in test and learn mode, and therefore has no current bearing on our long-term outlooks or ratings (including Facebook and Google, both of which we rate Outperform with $215/$1,250 price targets, respectively).”

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