{"id":264947,"date":"2025-11-01T12:52:29","date_gmt":"2025-11-01T12:52:29","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/264947\/"},"modified":"2025-11-01T12:52:29","modified_gmt":"2025-11-01T12:52:29","slug":"ai-told-them-which-stocks-to-buy-the-returns-are-wild","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/264947\/","title":{"rendered":"AI told them which stocks to buy. The returns are wild"},"content":{"rendered":"

Last year, startup founder Harpaul Sambhi made an unusual request to his wealth manager: He asked to have 10% of his portfolio returned to him.\u00a0<\/p>\n

It wasn\u2019t for a flashy sports car or a down payment on a house. Sambhi had something different in mind: a contest. He wanted to pit his human wealth manager against ChatGPT to see which brought him better investment returns.\u00a0<\/p>\n

\u201cIt was really out of sheer curiosity,\u201d said Sambhi, who runs the agentic AI platform Magical and lives in Marin.\u00a0<\/p>\n

Sambhi asked Deep Research \u2014 an AI agent within ChatGPT that produces intensive reports with citations \u2014 to identify companies supplying the backbone of the AI boom. The chatbot returned names such as Nvidia, Taiwan Semiconductor Manufacturing Company, and mining firms he\u2019d never heard of. He used his nest egg to buy stakes in the companies.<\/p>\n

Sambhi was prepared to lose money on the experiment \u2014 and he did, in relative terms. In the past year, his ChatGPT portfolio has delivered a 35% return, while his wealth manager has outperformed it with gains in the 40% range. (The S&P 500 index has risen around 15% since November.)\u00a0<\/p>\n

Listen toThe Standard Podcasts<\/p>\n

Life in Seven SongsTuesday, Sept. 24<\/p>\n

Five things we learned from our bare-all interview with Sam Altman<\/p>\n

\"Sam<\/p>\n

Two-thirds of adults who have used generative AI said they had asked it for financial advice, and around 80% of those who acted on that advice said it had improved their financial situation, according to a recent survey from Intuit Credit Karma (opens in new tab)<\/a>. Younger people are turning to chatbots at even higher rates \u2014 around 82% of Gen Z and millennial AI users reported leaning on it for financial guidance.<\/p>\n

Concerningly, though, the survey also found that more than half of respondents who acted on financial advice offered by AI said they had made a poor financial decision or a mistake in trying to follow the guidance.<\/p>\n

\u201cIt can be helpful, but extremely risky, to pick stocks based on chatbots,\u201d said Yaniv Konchitchki, a professor at UC Berkeley Haas School of Business and a professional macro forecaster for the Federal Reserve.\u00a0<\/p>\n

The \u2018secret sauce\u2019\u00a0<\/p>\n

Daniel Padilla, a San Francisco-based finance graduate who works at an energy startup, said growing anxiety about AI\u2019s impact on the labor market prompted him to rethink his traditionally conservative investment strategy.<\/p>\n

\u201cI was thinking, if AI is going to drive the cost of labor to zero, who\u2019s actually going to make money? Probably the companies using AI the best,\u201d Padilla said.\u00a0<\/p>\n

So he turned to the machines themselves for advice. Padilla asked four chatbots to design a stock portfolio that could outperform the market as the white-collar job apocalypse unfolds. Two of the chatbots refused to play along; Padilla said he \u201cbullied\u201d Perplexity and ChatGPT \u2014 both of which were initially reluctant to give him specific investment advice \u2014 into generating detailed portfolios.\u00a0<\/p>\n

\"ADaniel Padilla\u2019s Perplexity portfolio is up 49% since March. <\/p>\n

Perplexity suggested 11 investments, including 15% in the robotics and AI exchange-traded fund BOTZ, 15% in the Vanguard Value exchange-traded fund, and 5% in Palantir. ChatGPT suggested 16 investments, including 20% in BOTZ, 10% in the semiconductor exchange-traded fund SMH, and 6% in Nvidia.\u00a0<\/p>\n

Padilla followed the chatbots\u2019 investment advice, opening two accounts with $500 each and setting up weekly contributions of $75 to both.\u00a0<\/p>\n

\u201cI went into this thinking it was kind of like gambling, but it\u2019s turning out to be more serious than I expected,\u201d Padilla said. He now has $10,000 invested across both portfolios and recently raised his weekly deposits to $150.\u00a0<\/p>\n

His Perplexity portfolio is up 49% since he opened the account in March, while his ChatGPT portfolio is up 52%. (The S&P 500 index has risen around 22% over the same period.) One of his friends has followed suit, investing even larger sums using the same strategy.\u00a0<\/p>\n

Despite the impressive returns for Padilla, experts say AI chatbots lack the \u201csecret sauce\u201d that leads to consistently outsize returns.\u00a0<\/p>\n

\u201cIf you told me you were using ChatGPT to beat the market, I\u2019d ask: What\u2019s your information edge? Because without one, the AI is just repackaging the consensus,\u201d Konchitchki said.\u00a0<\/p>\n

The risk is that as more investors rely on the same AI-generated advice, their behavior becomes synchronized, leading to what economists call a \u201cliquidity illusion.\u201d This could lead to \u201cmini flash crashes\u201d powered by a range of AI systems reading the same headlines.\u00a0<\/p>\n

\"MarketPadilla\u2019s ChatGPT portfolio is up 52% since March. <\/p>\n

Another concern among economists is that chatbots may deliver biased advice. A study by UC Berkeley researchers (opens in new tab)<\/a> found that when chatbots aren\u2019t given demographic information, their preferences tend to skew toward investing more in stocks and keeping less cash \u2014 a reflection of the habits of young, high-income men. The good news, said Anastassia Fedyk, one of the study\u2019s authors, is that if users relay their demographic information, the chatbots do a better job matching their preferences.\u00a0<\/p>\n

Hersh Shefrin, a professor of finance at Santa Clara University, tells students to be cautious of advice they receive from chatbots.\u00a0<\/p>\n

\u201cAsk yourself who is on the other side of your trades, and whether those taking the opposite position are pros with access to better AI than you,\u201d Shefrin said.\u00a0<\/p>\n

For Sambhi and Padilla, using chatbots to help with investing is going to remain a hobby. Though Sambhi runs an AI company, he said he finds comfort in having a human wealth manager who also helps with financial planning and tax optimization.<\/p>\n

Padilla said he isn\u2019t under any illusion that ChatGPT is a replacement for his retirement plan. The majority of his savings remain in index funds.\u00a0<\/p>\n

\u201cIf the AI bubble pops,\u201d he said, \u201cthese two portfolios are going to get absolutely decimated.\u201d\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Last year, startup founder Harpaul Sambhi made an unusual request to his wealth manager: He asked to have…\n","protected":false},"author":2,"featured_media":264948,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,184,181,507,4320,3195,168,1283,1169,74],"class_list":{"0":"post-264947","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-anthropic","10":"tag-artificial-intelligence","11":"tag-artificialintelligence","12":"tag-chatbots","13":"tag-chatgpt","14":"tag-google","15":"tag-openai","16":"tag-stock-market","17":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/264947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=264947"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/264947\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/264948"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=264947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=264947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=264947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}