Investing tips from AI: A chatbot was asked to pick five stocks – This is Money

By Helen Kirrane For This Is Money
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Google’s new AI chatbot Bard and rival OpenAI’s ChatGPT are dominating the conversation surrounding artificial intelligence at the moment.
The availability of enormous quantities of data and new algorithms have led to major AI breakthroughs in many industries in recent years.
That seems to have accelerated dramatically in rrecent months and AI looks as if it will have major, disruptive impact on many walks of life – including the world of investing.
But can it pick good investments? Broker XTB.com asked AI to provide five stocks that would be good to invest in at the moment. Only time will tell if it gets this right, but we will check back in the future.
Battle of the Chatbots: Bard is Google’s answer to ChatGPT. 
Perhaps unsurprisingly, the AI stock picker replied with Apple, Microsoft, Amazon, Alphabet, Tesla.
Due to these stocks being extremely popular and quite obvious choices, Bard was then asked to give five lesser-known stocks that would be good to invest in
Here are its suggestions and reasoning:
Acacia Communications
Acacia Communications is a semiconductor company that makes high-speed data communication products. The company is growing rapidly and has a strong track record of innovation.
CrowdStrike Holdings
CrowdStrike Holdings is a cybersecurity company that provides cloud-based security solutions. The company is growing rapidly and is well-positioned to benefit from the growing demand for cybersecurity solutions.
Marqeta
Marqeta is a fintech company that provides payment processing solutions to businesses. The company is growing rapidly and is well-positioned to benefit from the growing e-commerce market.
Roblox Corporation
Roblox Corporation is a gaming company that operates a popular online gaming platform. The company is growing rapidly and is well-positioned to benefit from the growing popularity of online gaming.
Snowflake Computing
Snowflake Computing is a cloud computing company that provides data warehousing solutions. The company is growing rapidly and is well-positioned to benefit from the growing demand for cloud-based data warehousing solutions.
When it comes to stock indices and which ones were best to invest in, Bard provided the following answer.
Bard said: ‘I would say that the S&P 500 and the Nasdaq Composite are the best options. Both indices have a long history of growth and have outperformed other indices over the long term.
‘The S&P 500 is a market-cap-weighted index of the 500 largest publicly traded companies in the United States. 
‘It is a good index to invest in if you are looking for exposure to the U.S. stock market. The Nasdaq Composite is a market-cap-weighted index of all the stocks listed on the Nasdaq stock exchange. It is a good index to invest in if you are looking for exposure to the technology sector.
‘Both indices are relatively low-cost and offer diversification benefits. They are also liquid, meaning that you can easily buy and sell shares.’
XTB.com said: Overall, this artificial intelligence chatbot gave some quite detailed answers into certain questions such as lesser-known stocks to invest in.’
A quick glance at the AI stock picks shows them to be heavily tech-focussed, so what does an investing expert think? 
Jason Hollands, a director of Evelyn Partners, sounded a note of caution. He said: ‘Snowflake Communications and CrowdStrike are both constituents of the Robo Global Artificial Intelligence Index, a part of the market where a lot of hot money is pouring in at the moment, driving valuations into bubble like territory.’ 
He added: ‘I would caution against anyone buying stocks they are unfamiliar with simply on the basis of a list served up by a free AI chatbot.
‘Generative AI tools like Bard and ChatGPT are hugely fascinating but are designed to generate content and not to select investments.’
He also points out that one of Bard’s suggestions, Acacia Communicatons, was acquired two years ago by tech giant Cisco Systems and is no longer publicly listed itself. 
When creating a portfolio for the long term, it’s important to consider the amount of risk you want to take and make sure you diversify across various asset classes, markets, and sectors.
One way to play the AI boom but limit your exposure to individual risky stocks is to use a fund or investment trust.
AI-focussed ETFs exist, which allow investors to target a basket of stocks, such as WisdomTree Artificial Intelligence and L&G Artificial Intelligence. 
Make sure you do careful research in what is in such an ETF and how it fits with your appetite for risk before investing.
Winterflood Securities, an investment trust research firm recently identified a list of 18 companies with AI exposure, including: semiconductor companies (Nvidia, Taiwan Semiconductor Manufacturing, ASML, AMD, Applied Materials and Intel); search companies (Alphabet, Microsoft and Baidu); enterprise and productivity software companies (Salesforce, Workday, HubSpot, SAP and ServiceNow); and companies offering cloud computing (Amazon, IBM, Oracle and Cisco).
There are also some investment trusts with AI exposure that invest in these. 
Several investment companies in the AIC’s Technology & Technology Innovation sector have high exposure to these companies. With the greatest being Allianz Technology Trust and Polar Capital Technology. 
Allianz Technology has exposure to 13 of the companies, while Polar Capital Technology holds 12 of them
Gaining exposure to generative AI could mean investing in one of the big tech giants, but you can also get it through a smaller, lesser-known company.
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Jesse
https://playwithchatgtp.com