Meme stocks are an investing category that’s hard to pin down. They aren’t a market sector like tech stocks or EV stocks. They aren’t necessarily small or large in market capitalization. Instead, they’re all about the “vibe” they project. Meme stocks are more or less decided by the mob of retail investors that buy into them. They are stocks associated with an internet investing culture. And while they don’t make themselves out to be serious, growth-oriented investments, their volatility has made some lucky investors quite wealthy. This begs the question: Could someone use artificial intelligence (AI) to pick these stocks?
ChatGPT is becoming more and more popular as a search engine of sorts for all manner of questions. The AI chatbot is becoming a popular tool for explaining complex topics, composing emails or outlining essays, line-editing code, and more. Investors have been taking to the bot, too, to understand topics on investing. In some cases, people have been tasking ChatGPT with coming up with investing insights. Previously, I had asked the chatbot to give its opinions on crypto. This time, I asked it all about meme stocks.
Being an investing class focusing more heavily on “vibes” and less on fundamentals or business models, I was curious to hear how an AI model defined such an investment class. Moreover, I wanted to know which stocks it thought belonged in the meme stocks class by tasking it to pick out 10 meme stocks to buy. Here’s what I learned.
ChatGPT Defines and Picks Meme Stocks to Buy
Being that meme stocks are so hard to define, I decided to ask ChatGPT how to explain one in the first place. Like most of us, the chatbot doesn’t have a rigid outline of checkboxes a stock must check to fall into the category. The metric ChatGPT most relies on to define a meme stock is mostly its presence in social media investing circles:
“[A meme stock is] a stock that has become popularized and heavily traded due to its association with a popular internet meme or social media trend. These stocks are often characterized by significant volatility and sudden price surges or drops, driven by social media buzz and online discussions rather than traditional financial metrics such as earnings or revenue.”
This is honestly one of the best ways to define the trend. When I asked it to name 10 meme stocks with high growth potential, its list was wildly mixed. The only thing really linking these stocks together was the fact that they have all had or currently are having social media moments. Here are the stocks it named:
- GameStop (NYSE:GME)
- AMC Entertainment (NYSE:AMC)
- BlackBerry (NYSE:BB)
- Nokia (NYSE:NOK)
- Bed Bath & Beyond (NASDAQ:BBBY)
- Tesla (NASDAQ:TSLA)
- Palantir Technologies (NYSE:PLTR)
- Virgin Galactic Holdings (NYSE:SPCE)
- Beyond Meat (NASDAQ:BYND)
- Moderna (NASDAQ:MRNA)
When I asked the chatbot to elaborate on its meme stock picks a bit more, its reasoning was more or less the same across each stock. For the most part, they are not alike at all. These companies deal in retail, movie theaters, pharmaceuticals, space travel, fake meat, etc. What binds them together is that they’re not just popular with retail investors but have each been picked up heavily across social media channels.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.