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On 6 January, I asked ChatGPT for its “best 3 S&P 500 stocks for me to buy for the next five years”.
Admittedly, we’re only five months into the year, but given the incredible amount of volatility the index has displayed during this time, I thought I’d revisit its picks.
The trio
The three S&P 500 stocks that ChatGPT rattled off were Nvidia (NASDAQ: NVDA), Microsoft, and Visa.
It said Nvidia was “driving the AI revolution” with its leading chips and was perfectly positioned as the “picks and shovels provider in a gold rush“. Fair comment, I thought, despite a very high price-to-sales ratio at the time.
Microsoft was a bit too obvious for me, given it was another $3trn+ tech giant. Payments processor Visa was less obvious, but a solid pick I commented. ChatGPT said Visa was a “toll collector” likely to continue benefitting from the rapid shift towards a cashless world.
With Visa as one of my top holdings, I found it hard to disagree with this. That said, potential regulation impacting Visa’s fee structure and therefore profits is a future risk not mentioned by the chatbot.
Overall though, I thought these were solid blue-chip picks, and I made a note of their prices at the time. Here’s how they’ve done since.
| Share price performance since 6 January | |
| Nvidia | -5.8% |
| Microsoft | +8.5% |
| Visa | +17.2% |
| Average | +6.6% |
As we can see, the average is 6.6%, which is good considering the S&P 500 is broadly flat across this time.
Fool vs bot
On the same day in January, I gave my own top 3 S&P 500 stocks to consider buying in 2025. They were different from the bot’s picks.
Here’s how they’ve performed since then.
| Share price performance since 6 January | |
| Axon Enterprise | +23.5% |
| Uber | +44.5% |
| Amazon | -8% |
| Average | +20% |
The average here is 20%, which is handily above both ChatGPT and the wider market.
Again though, we’re only a few months into the year. There’s no guarantee that these stocks will continue to outperform by a wide margin over the next four-and-a-half years (but I still think they will).
Bullish bot
Looking at this, I’m happy for now to rely on my own intelligence for stock-picking rather than the artificial kind. Still, I was curious to see whether ChatGPT had changed its ‘mind’, so I just asked it the question again.
Here were its picks: Microsoft, Nvidia and Visa! Clearly then, the bot is very committed to these names.
Now, I should mention that I’ve bought shares in Nvidia since January. I did so when the market sold off in April.
Since then, a couple of key things have happened. One is that the stock is up 42%, which means it’s more expensive now than it was. Currently, it’s trading at 26 times sales and 31 times forward earnings.
There’s risk at this valuation if key cloud platform customers pull back on AI spending and Nvidia’s growth slows faster than anticipated. It’s also facing stricter export bans to China.
On the other hand, Nvidia has found a major new export customer in the shape of oil-rich Saudi Arabia. An AI start-up backed by the kingdom’s sovereign wealth fund has ordered 18,000 of Nvidia’s top-shelf Blackwell chips.
Over the next five years, Saudi Arabia will buy “several hundred thousand” of its chips to build AI factories.
