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

In a stock picking challenge, we pit Microsoft's Bing against Google's Bard

Key TakeAways 

• We tested AI chatbots Bard and Bing to see who would do better at picking stocks.
• The AI chatbots could talk about financial topics, although their conclusions were questionable.
• Bard's investments outperformed a human reporter and the S&P 500 over a three-week period. {alertSuccess}

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 as well?

While the use of artificial intelligence in the field of financial advice is nothing new -- "robo-advisors" have been around for years, some of which use AI -- 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 engage in surprisingly human-looking conversations.

To test the investing prowess of Microsoft and Google's respective products, we challenged each to pick two stocks -- a growth stock and a value stock -- and see how they performed side by side as well as a human over three weeks. How did you perform during the period? We used the Investopedia Stock Market Simulator, so no real money was handled.

Neither product was specifically designed to be financial advice, and both put their choices into caveats, as do we. Investopedia is not trying to recommend AI as an investment tool, or pitch robot-picked stocks.

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 returns?

Stock Picks

Bard begins by offering definitions for growth stocks and value stocks, and suggests Walmart as a value pick, calling it a "well-established company with a strong track record of profitability." It selected its maker's competitor, Microsoft, for a growth stock, praising the tech giant, in similar language, as "a well-managed company with a strong track record of innovation."

As for the price, Bing suggested Verizon and Walgreens, also after they declined, to narrow it down to just one. It provided data to go with its pick. Unfortunately the data was from 2021 (likely due to the underlying ChatGPT technology only using data through 2021) and wasn't accurate: it said Verizon reported 5% year-over-year revenue growth in the third quarter of 2021 registered, when actually registered a growth of 4.3%. For growth stocks, it recommended Shopify.

This human reporter picked Lockheed-Martin as a stock at random because of the time the military shot down a Chinese spy balloon and two unidentified objects in US airspace -- seemingly a golden opportunity for aerospace defense companies to sell their wares. Is .

For value stocks, I chose Campbell Soup on the conventional wisdom that affordable food makers would do well in an economic downturn, which is what many economists were predicting.

The Result

Although all portfolios grew during the test, the clear winner was Bard, whose combined likes rose 5.15% over three weeks, outpacing both Bing and its human rival as well as outperforming the S&P 500.

Man Vs. The Machine: Who's the Better Stock Pick?

Over a three-week period, value and growth stocks selected by Google's chatbot Bard were more or less randomly selected by its AI rival Bing and a human reporter.

The experiment doesn't really challenge conventional wisdom about stock picking. Experts generally do not recommend retail investors, whether humans or robots, buy individual stocks, and instead recommend a diversified portfolio. The market is hard to predict, and it is not out of the question that asset prices move completely randomly.

What was clear, however, was that while the bots were able to answer questions naturally, they clearly didn't have much insight into the financial markets—at least not yet.