Can artificial intelligence pick good stocks? Investors have bought into companies that benefit from artificial intelligence, but what if you ask ChatGPT for good stock picks?
It isn’t easy to get stock recommendations out of ChatGPT. If you ask the wrong questions, ChatGPT will simply say that it’s not a financial advisor and proceed to provide general financial advice like diversifying your portfolio. If you ask ChatGPT for the top 10 stocks, you will receive large-cap companies
After providing several inputs and not receiving much luck, I finally came across a query that resulted in stock recommendations.
ChatGPT has training data that goes to early 2022. It’s important to keep that in mind when asking ChatGPT any questions. Even with these recommendations, the app recommends doing your own research or speaking with a financial advisor before making any decisions.
Out of the ten stocks ChatGPT recommends, these are some of the stocks you may want to keep on your radar.
Microsoft (MSFT)
ChatGPT recommends Microsoft (NASDAQ:MSFT) due to its software products, such as the Windows operating system and Office suite. ChatGPT does not mention Microsoft Azure in this recommendation, but that cloud computing component is a significant revenue and profit driver for the company.
Shares have more than tripled over the past five years and the stock has become a top pick for many funds. If you look at the Top 10 Holdings for most mutual funds and ETFs, you will find Microsoft somewhere high on that list.
Microsoft has been a leading company in the artificial intelligence industry, and the company’s latest move can fortify its position. The company recently began selling an AI tool for Microsoft Office. Analysts believe this revenue stream can generate $10 billion per year for the company by 2026.
This new product has a steep barrier to entry. Corporations need at least 300 members in Microsoft Office, and each member requires a $30/mo payment. That means the total monthly cost for this AI tool is $9,000.
Investors should expect this tool to become mainstream in future years and not limited to 300 members. However, that’s the current requirement in place to access the AI tool.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) was another ChatGPT pick. The AI tool focused on stocks that were worth $1 trillion, previously had that valuation, or are on their way to that milestone.
After a brief hiccup with a Rivian (NASDAQ:RIVN) investment gone wrong, the e-commerce giant is back to generating high profits for shareholders. The company’s success in 2023 has sent the stock soar by 60% year-to-date.
Amazon also reported an impressive $143.1 billion in revenue in the third quarter. It marks a 13% year-over-year increase. Amazon’s e-commerce store and web services do the heavy lifting. However, the company also has exposure to other verticals, such as streaming, video games, and other industries.
Amazon has also evolved into an advertising company and offers ad placements for business owners. These ad placements can continue to help the company generate revenue. It’s also important to remember that Amazon offers a different experience from social networks.
While most people go on social media to catch up on the news and browse, many people go on Amazon to buy products. The consumer’s mentality is different when they are on Amazon, and that can help the company charge premiums for ad placements.
Amazon can continue to gain market share in the advertising industry, and that’s one of the many business segments that the corporation has.
Visa (V)
Visa (NYSE:V) also earned a spot in ChatGPT’s list of recommendations. The multinational financial services company acts as a middleman between financial institutions and consumers. Rising credit and debit card activity translates into more revenue and profits for the corporation.
Visa is a reliable blue-chip stock that rewards investors with high-profit margins and a rapidly growing dividend. The company closed fiscal 2023 with 11% year-over-year revenue growth and 19% year-over-year net income growth in the fourth quarter. Those growth rates helped Visa exceed a 50% profit margin, a normal outcome for the company.
Visa’s closest competitor is Mastercard (NYSE:MA) but there is plenty of space for both companies. Visa and Mastercard have a duopoly over the credit and debit card industry. Visa continues to experience year-over-year growth in payment volume, cross-border volume, and processed transactions. Visa also initiated a $4.1 billion stock repurchase in the three months ended September 30th.
On the date of publication, Marc Guberti did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.