Meme stocks are an asset class that’s hard to pin down. They’re not a market sector like tech stocks or EV stocks. They are not necessarily small or large in market cap. Instead, it’s all about the “mood” they project. Meme stocks are more or less determined by the mass of retail investors who buy into them. They are stocks associated with an internet investing culture. And while they don’t present themselves as 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 kind of search engine for all sorts of questions. The AI chatbot becomes a popular tool for explaining complex topics, composing emails or sketching essays, editing lines and more. Investors also use the bot to understand investing topics. In some cases, people have hired ChatGPT to provide investment insights. Earlier, I asked the chatbot to give his opinion on crypto. This time I asked everything about meme stocks.
Being an asset class that focuses more on “vibes” and less on fundamentals or business models, I was curious to hear how an AI model would define such an asset class. I also wanted to know which stocks he thought belonged in the meme stock class by asking him to select 10 meme stocks to buy. Here’s what I learned.
ChatGPT defines and selects meme stocks for purchase
Since meme stocks are so hard to define, I decided to ask ChatGPT how to even explain one. Like most of us, the chatbot doesn’t have a rigid outline of checkboxes that a stock must tick to fall into the category. The metric ChatGPT relies on most to define a meme stock is primarily its presence in social media investing circles:
“[A meme stock is] a stock that has become popular and trades heavily due to its association with a popular internet meme or social media trend. These stocks are often characterized by significant volatility and sudden spikes or falls in price driven by social media buzz and online discussion rather than traditional financial metrics like earnings or sales.”
This is honestly one of the best ways to define the trend. When I asked her to name 10 meme stocks with high growth potential, her list was wildly mixed. The only thing that really tied these stocks together was the fact that they’ve all had, or are currently having, social media moments. Here are the named shares:
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, its reasoning was more or less the same for each stock. For the most part they are not alike at all. These companies deal in retail, cinemas, pharmaceuticals, aerospace, fake meat, etc. What unites them is that they are not only popular with retail investors but have also received a lot of social media coverage.
At the time of publication, Brenden Rearick held no position (neither directly nor indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publicity guidelines.
Brenden Rearick is a Financial News Writer for InvestorPlace’s Today’s Market team. He mainly covers digital assets and technology stocks, with a focus on crypto regulation and DeFi.
