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Experts predict that generative artificial intelligence (ai) will automate many routine tasks in the coming decades, adding trillions to global productivity. Most of the innovators leading the charge are in the S&P 500which increased by 23.3% last year.
Can ai automate my stock picking ideas? Well, over the weekend, I asked ChatGPT for their “3 Best S&P 500 stocks I Can Buy Over the Next Five Years.” Here's the trio he came up with.
Here are the bot's responses
The first choice of the application was NVIDIA (NASDAQ: NVDA), which he said is “driving the ai revolution”in data centers with their main graphics processing units (GPUs). It is positioned as the “picks and shovels supplier in a gold rush“.
ChatGPT then chose microsoft. He said the software giant has “transformed into a leader in cloud and artificial intelligence”. Its Azure platform is driving global digital transformation, while the company enjoys attractive recurring subscription revenue.
Lastly, the ai assistant called Visa (NYSE: V). The payments giant thrives as “toll collector“That is benefiting from the shift to a cashless world.
my thoughts
My initial reaction to these picks is that they are very strong. All three companies are market leaders, with formidable competitive advantages, exceptional profit margins and top-notch management.
On the other hand, I also think they are very obvious. With market capitalizations of more than $3 trillion, Nvidia and Microsoft are the second and third largest companies in the S&P 500. Visa, meanwhile, is a $617 billion giant.
I have owned Nvidia stock in the past, while Visa remains one of my top holdings. Unfortunately, I've never bought Microsoft stock, but you could get some good exposure by simply buying a fund tracking the S&P 500 index.
As expected, ChatGPT summarizes its business models and strengths well. However, the information he recites is pretty generic and can be found anywhere online (which isn't surprising given that's where he got it from).
Stock Specific Risks
The robot does not offer any fundamental analysis and does not mention, for example, that Nvidia's gross margin has fallen from 78.4% in the first quarter of 2025 to a forecast of 73.5% in the fourth quarter of 2025.
Additionally, there was no mention that Nvidia stock trades at 32 times trailing sales. If the company's future growth trajectory ends up lower than expected, the valuation may not be sustainable.
Microsoft stock is in a similar position, trading at an expensive 32 times forward earnings. Much of the ai-driven growth is already priced in, including that of OpenAI, parent of ChatGPT (in which Microsoft has a large stake).
For Visa, ChatGPT bypasses Vice President-elect JD Vance's Credit Card Competition Act. This bill aims to reduce card usage fees (typically between 2% and 4%) shared by payment processors like Visa and the card-issuing bank. If passed, this bill could impact Visa's profit margins.
However, this does not mean that I will sell my shares. Visa is lobbying hard against such legislation, arguing it could have unintended consequences for businesses and consumers. But I would say it would be helpful for people to know this context before deciding whether to invest.
I will keep an eye on these
I certainly wouldn't bet against this trio outperforming over the next five years. What I'll do is track their performance to see if they really turn out to be the best S&P 500 stock to buy right now.
