A new study highlights a surprising trend: despite advancements in artificial intelligence, investors continue to place more trust in human analysts over AI systems for stock market predictions.

The research, conducted by Dr. Gertjan Verdickt from the University of Auckland and Francesco Stradi of KU Leuven, surveyed 3,600 U.S. participants to gauge their trust in different sources of financial forecasts.

The study presented stock predictions from human analysts, AI systems, and a combination of both.

Ultimately, human analysts were deemed the most trustworthy, with AI predictions facing significant skepticism.

"We found that investors are more likely to believe human analysts first, followed by a combination of both human and AI," Verdickt said.

He added that these findings were unexpected, given AI's reputation for precise data analysis.

"While AI can outperform human analysts in some cases, trust remains a considerable barrier."

University of Auckland lecturer Dr Gertjan Verdickt

The study also revealed demographic differences in trust levels.

Women and people with a strong understanding of AI were more receptive to AI-generated advice, while men generally showed more skepticism.

"Men tend to be overconfident in their financial abilities, which may explain their reluctance to trust AI," Verdickt explained.

Political affiliation also influenced trust, with Democrats showing a greater tendency to trust AI forecasts than Republicans.

The researchers further tested whether familiarity with AI tools like ChatGPT might boost trust.

However, substituting "AI" with "ChatGPT" did not increase trust. In fact, ChatGPT was viewed with even more caution.

"Our results suggest that merely replacing ‘AI’ with a more familiar name like ChatGPT does not improve investor confidence," Verdickt said.

Verdickt believes these insights could guide financial institutions in how they implement AI.

He emphasised the need for clear communication about AI's role in financial analysis and suggested that organisations should consider demographic factors when integrating AI tools.

The findings also hint at the potential need for regulatory guidelines to ensure transparency in AI-based financial services.