(News Bulletin 247) – More than a year after the launch of ChatGPT, nearly one in four individual investors at Etoro now hold shares linked to artificial intelligence, according to a study by the broker.

In the space of a short year, ChatGPT has become a real fashion phenomenon. Extremely efficient, the conversational robot from the American start-up OpenAI beats all usage records thanks to its ease of use. The quality and speed of ChatGPT’s responses have also generated real enthusiasm among users. And financial markets, which have begun to see significant potential for monetizing generative AI (artificial intelligence).

With the rise of generative AI, two companies have particularly stood out on the stock market in 2023: Nvidia and Microsoft. The graphics processor specialist has been the darling of Wall Street with a price that jumped more than 240% in 2023. It is also continuing its rally, increasing by 10% since the start of the year to break new records. The second company mentioned is not left out. Microsoft also had a good stock market performance last year, with its shares up 56.80%. Quarter after quarter, it has reported growth driven by several of its flagship products and divisions, which now integrate ChatGPT technologies.

Moreover, the Redmond group recently dethroned Apple as the world’s largest market capitalization.

Strong enthusiasm from French investors

It was no less necessary for the craze for conversational robots to also be shared by individual investors. In France, 24% declare that they hold shares linked to artificial intelligence in their portfolios, indicates a study by broker Etoro carried out among 10,000 individual investors in 13 countries. The broker had surveyed a panel of its clients on their exposure to companies that are developing or investing heavily in AI.

In France, 32% of respondents plan to invest in AI-related companies in the future, while 34% do not want to be exposed to such stocks.

“AI stocks have been the performance giants of 2023, leading the tech sector revival and propelling the S&P 500 into bull market territory. This time last year, many of us were starting to understand the enormous potential offered by new generative AI technologies, following the launch of ChatGPT, and retail investors have voted with their feet on this subject over the last 12 months”, analyzes Antoine Fraysse Soulier, head market analyzes at Etoro.

From a generational point of view, it is young investors who are showing their appetite for this high-growth sector. Nearly half (49%) say they currently hold AI-related stocks. And with age this proportion tends to reduce, according to this study. Only 25% of investors aged 35 to 44 say they are exposed to artificial intelligence in the stock market, a proportion which drops to 21% for 45-54 year olds. And only 11% of investors aged over 55 answered in the affirmative.

“AI trends helped make Nvidia and Meta Platforms the best stock performers in the S&P 500 last year, with their stock prices more than tripling. Although we are unlikely to see to a repeat of the performance of leading AI companies in 2024 to the same extent, the benefits of its rapid adoption extend to the entire stock market and economy as it rapidly moves from craze for reality”, continues the Etoro specialist.

Decision support

The quality of the answers offered by ChatGPT can bluff more than one person. This precision even pushes certain individual investors to seek advice from the conversational robot to guide them in their investment choices. According to the Etoro study, 9% of them say they use ChatGPT type tools to help them choose their investments.

Once again, it is the youngest investors who adopt these tools the most, one in five (20%) of 18-34 year olds using AI tools compared to 5% of those over 55, says Etoro.

“While in mid-2023, 28% of retail investors said they were open to trying artificial intelligence to manage their portfolios, at the end of 2023 this share increases to 31%,” adds Etoro.

However, we draw attention to the risks of entrusting one’s choices to artificial intelligence. In a post published on LinkedIn in February 2023, Stephane Renevier, analyst for the financial portal Finimize, explained that ChatGPT could potentially help dissect the strengths and weaknesses of a stock, but always by verifying and deepening its analysis.

And we reiterate common sense advice, namely finding out about the securities in question, diversifying your portfolio, and choosing your investment based on your risk aversion and your investment horizon.