Alternative data is any information used for investment research that comes from outside traditional financial sources: earnings reports, balance sheets, guidance, and analyst estimates. The category is broad. It includes everything from satellite imagery of parking lots to search volume trends, credit card transactions, TikTok hashtag counts, web traffic, and news sentiment scores.
The core idea is simple: financial statements describe what already happened. Alternative data can describe what is happening now, or what is about to happen. For investors trying to anticipate earnings, track dema