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- AIIP Methodology
The AIIP Methodology
Our methodology is a rules-based system used to evaluate and rank AI stocks, drawing on growth/fundamental strength and market momentum.
The system is titled the AIIP Algorithm Methodology and is designed to identify breakout AI stocks using structured, rules-based financial data. Its goal is to uncover stocks exhibiting accelerating fundamentals, strong cash flow, and reasonable pricing, before they achieve widespread popularity.
All proprietary scores are calculated using data supplied by Finbox, which aggregates institutional-quality fundamentals from providers such as S&P Global Intelligence.
The overall stock evaluation is driven by two main components: the Total Score (measuring growth/fundamentals) and the Relative Strength (RS) Score (measuring momentum).
1. The Total Score (Growth/Fundamentals)
The Total Score is calculated out of 100 and combines three weighted categories to assess overall business strength. The model is growth-weighted by design.
Category | Weight | What It Measures |
|---|---|---|
Growth | 65% | Revenue + EPS growth, both actual and forecast. |
Financial Quality | 25% | Financial strength, profitability, and debt position. |
Valuation | 10% | Pricing relative to growth potential (PEG) |
2. Relative Strength (RS) Score
The Relative Strength (RS) Score measures a stock’s price performance relative to the AI universe, which includes over 170 AI-focused public companies. This score ranges from 0 to 100.
3. Ranking Status (Criteria for Inclusion)
A stock's Ranking Status is assigned based on combining the Total Score and the Relative Strength (RS) Score. To qualify for the Watchlist, a stock must meet high thresholds in both categories.
Ranking Status | Total Score (Fundamentals) | RS Score (Momentum) |
|---|---|---|
✔️ Watchlist | Equal or Above 70 (out of 100) | Equal or Above 80 (out of 100) |
📊 Fundamental | Equal or Above 70 (out of 100) | Below 80 (out of 100) |
📈 Momentum | Below 70 (out of 100) | Equal or Above 80 (out of 100) |
🚫 No Signal | Below 70 (out of 100) | Below 80 (out of 100) |
Watchlist Status - Meets the full criteria for a strong investment candidate, possessing both robust fundamentals and significant market momentum.
Fundamental Status - Exhibits strong underlying business fundamentals but has not yet achieved the required market momentum or price strength.
Momentum Status - Is experiencing significant market interest and price strength, but its underlying fundamentals, as measured by the algorithm, place its Total Score below the required threshold.
No Signal - Fails to meet the minimum required thresholds for both fundamental and momentum scores.
Disclaimer - The information contained on this site does not constitute investment advice or a personal recommendation, nor is it an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investments, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all. The information presented is based on publicly available data and sources believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Market conditions can change rapidly, and the information provided may no longer be up to date. This content is for informational purposes only and should not be construed as financial, legal, or tax advice.