A striking trend has emerged in retail investing where artificial intelligence chatbots, led by OpenAI’s ChatGPT, are transforming how everyday investors select stocks. As of yesterday’s reports, at least one in ten retail investors globally now uses AI chatbots for stock picking, sparking a 600% surge in the robo-advisory market—a sector poised to grow from $61.75 billion last year to almost $471 billion by 2029.
This rapid adoption signals a seismic shift in investment behavior. AI tools, once confined to the realms of professional money managers with costly terminals and expensive data, are now accessible on ordinary devices for millions. Surveys conducted by broker eToro reveal nearly 13% of retail investors actively using ChatGPT for stock decisions, with another 50% open to trying AI-based investment guidance.
What makes this story particularly compelling is the evidence of AI’s impact. In an experiment conducted by financial site Finder in March 2023, ChatGPT was asked to curate a basket of 38 stocks based on criteria including low debt and sustained growth. The portfolio, featuring names like Nvidia, Amazon, Procter & Gamble, and Walmart, delivered a remarkable 55% return. This performance surpassed the returns of the UK’s top 10 mutual funds by almost 19 percentage points, showcasing the potential of AI-curated portfolios to deliver competitive results.
Yet experts caution that while these numbers impress, they come against a backdrop of one of the strongest bull markets in recent memory. U.S. stocks remain near record highs, buoyed by strong consumer spending and economic resilience, making it easier for many strategies to succeed.
Dan Moczulski, UK managing director at eToro, warned that treating generic AI chatbots as flawless stock pickers is risky. “These models can sometimes misquote figures, lean too heavily on past narratives, and rely excessively on historical price action, which may not predict the future accurately,” he said. Moczulski emphasized the importance of specialized AI platforms designed for financial markets rather than generalist chatbots.
There is also a technical limitation: ChatGPT and similar models lack access to real-time, paywalled data that professional analysts use for rigorous investment analysis. The reliance on publicly available or outdated data means that AI-generated recommendations can miss critical market-moving information.
Jeremy Leung, a former UBS analyst who has embraced ChatGPT to assist in managing his portfolio, pointed out that the effectiveness of AI tools depends heavily on the prompts and instructions given. “The more context you provide, the more accurate the responses,” Leung said, highlighting that users must apply financial knowledge to get meaningful guidance from the AI.
The implications of this trend are profound. For millions of retail investors, AI chatbots offer a way to navigate complex markets with unprecedented access to sophisticated analysis without asking for professional help. Yet the democratization comes with heightened risks, given that many users may lack the expertise to interpret AI advice or implement adequate risk management.
Financial advisors remain cautious, underscoring that AI cannot yet replace human judgement, especially in volatile or uncertain markets. ChatGPT itself reminds users that it does not provide professional financial advice and that investment always carries risk.
As the robo-advisory market marches toward an expected $471 billion in revenue by 2029, the rise of AI-driven retail investing marks both an opportunity and a caution flag. Investors eager to harness AI’s power should proceed with awareness of its limits, combining technology with traditional research methods.
This fast-moving development, which broke out publicly just yesterday, underscores a turning point in investing—one defined by an infusion of cutting-edge technology but still grounded in the fundamentals of careful decision-making.
