Battle of the Bots: Which AI is Better at Picking Stocks?

We pit Microsoft’s Bing against Google’s Bard in a stock-picking challenge

A trader's computer screen is displayed as financial professional work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, May 15, 2017 in New York City. The Dow Jones industrial average was up 85 points at close on Monday, in addition to record setting days by the Nasdaq and S&P 500.

Drew Angerer / Getty Images

Key Takeaways

  • We tested AI chatbots Bard and Bing to see which would do better at picking stocks.
  • AI chatbots can talk about financial topics, although their conclusions were questionable.
  • Bard's investments did better over a three-week period, beating a human reporter and the S&P 500.

AI chatbots can write a poem, do your homework, draft lawsuits, and maybe even take your job, if the hype is to be believed. Can they handle your investments, too?

While the use of artificial intelligence in the realm of financial advice is nothing new—”robo-advisors” have been around for years, some of which use AI—the chatbot technology is rapidly becoming more accessible to individual investors. 

Google’s Bard and Microsoft’s chatbot, powered by ChatGPT and integrated into its Bing search engine, can interact with users in plain English and can engage in surprisingly human-seeming interactions.

To test the investing abilities of Microsoft and Google’s respective products, we challenged each one to pick two stocks—one growth stock and one value stock—and see how they did over a three-week span compared to one another as well as a human. We used the Investopedia stock market simulator, so no actual money changed hands.

Neither product was designed specifically to offer financial advice, and both couched their picks in caveats, as do we. Investopedia isn’t trying to recommend AI as an investing tool, or pitching the stocks the robots chose.

We started by asking each bot the same question: If you had to buy one value and one growth stock to hold, which would provide the highest return?

The Stock Picks

Bard began by offering the definitions for growth stocks and value stocks, and suggested Walmart as a value pick, calling it a “well-established company with a strong track record of profitability.” For a growth stock it selected its creator’s competitor, Microsoft, praising the tech giant, in oddly similar language, as “a well-managed company with a strong track record of innovation.”

For value, Bing suggested Verizon and Walgreens, refusing, even after prodding, to narrow it down to just one. It provided data to go along with its pick. Unfortunately the data was from 2021 (possibly due to the underlying ChatGPT technology only using data through 2021) and wasn't accurate: It said Verizon reported year-over-year revenue growth of 5% in the third quarter of 2021, when it actually reported 4.3% growth. For a growth stock, it recommended Shopify.

This human reporter picked stocks in a haphazard manner, choosing Lockheed-Martin because the military had, at the time, just shot down a Chinese spy balloon and two unidentified objects in U.S. airspace—seemingly a golden opportunity for aerospace defense companies to sell their wares. For a value stock, I picked Campbell Soup on the conventional wisdom that the affordable food manufacturer would do well in the economic downturn that many economists were forecasting.

The Results

Although all the portfolios rose over the course of the trial, the clear winner was Bard, whose combined picks rose 5.15% over three weeks, trouncing both Bing and its human opponent as well as outperforming the S&P 500. 

The experiment doesn’t really challenge the conventional wisdom about stock picking. Experts generally don’t recommend retail investors, be they human or robot, buy individual stocks, and advise a diversified portfolio instead. The market is hard to predict, and it’s not even out of the question that asset prices move completely at random.

What was obvious, however, was that while the bots were able to respond to questions in a natural-sounding way, they clearly don't have much insight into financial markets-at least not yet. 

Article Sources
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  1. SSRN. "How Much Artificial Intelligence Do Robo-Advisors Really Use?"

  2. Verizon. "Verizon reports strong 3Q revenue growth momentum."

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