AI Stock Picking Experiment Shows Surprising Early Results
A Hundred-Dollar Bet on AI
Armed with just $100 and a bold idea, a Redditor named Nathan Smith has embarked on a fascinating project: letting ChatGPT take the reins as a day trader. As detailed in a post on the r/Dataisbeautiful subreddit, Smith's goal is a "6-month experiment to see how a language model performs in picking small, [under-covered] stocks with only a $100 budget."
The Initial Results Outpace the Market
So far, this high-tech gamble appears to be succeeding. A chart shared by Smith shows that the AI-managed portfolio has surged by 25 percent in its first month. While the small initial investment means this amounts to a $25 profit, the performance is what's truly noteworthy. The AI, specifically OpenAI's advanced GPT-4o model, has significantly outperformed key benchmarks. For comparison, the S&P 500 grew less than 3 percent over the same period, while small-cap stock indexes like the Russell 2000 and XBI also saw much smaller gains. This suggests ChatGPT's initial selections were impressively accurate.
Its going viral on Reddit.
Somebody let ChatGPT run a $100 live share portfolio, restricted to U.S. micro-cap stocks.
Did an LLM really bit the market?.
- 4 weeks +23.8%
while the Russell 2000 and biotech ETF XBI rose only ~3.9% and 3.5%.
Prompt + GitHub posted
---… pic.twitter.com/3ev8aZ0OTG
— Rohan Paul (@rohanpaul_ai) July 29, 2025
Not the First AI Trading Rodeo
This isn't the first time someone has tested an AI's financial acumen. Last December, a study in the journal Finance Research Letters from German researchers indicated that advanced AI models could indeed pick profitable stocks. However, not all findings are as optimistic. University of Florida finance professor Alejandro Lopez-Lira told Morningstar that his long-term simulations showed ChatGPT wasn't exceptionally great at stock selection, cautioning that "results on paper are much more optimistic than what the performance in reality would be."
There's also a fundamental paradox: if AI became a demonstrably superior stock picker, markets would quickly adapt as traders adopted the technology, erasing the very advantage it offered.
The Human Behind the Bot
Inspired to test the bold claims of ads promoting AI's ability to find undervalued stocks, Smith decided to see for himself. On a GitHub page documenting the project, he noted that after seeing gimmicky ads, he wondered, "How well would that actually work?"
The answer seems to be 'quite well,' but it's not without significant human guidance. Smith clarifies that he provides ChatGPT with daily trading data for its portfolio and implements a strict "stop-loss" rule, which forces a sale if a stock drops to a predetermined price. Although the experiment aims to see if AI can "manage money without guidance," this daily human intervention is a key part of the process, at least for now.
An Experiment to Watch
Despite the human element, the project offers a compelling glimpse into what's possible at the intersection of AI, a small budget, and some dedicated effort. Of course, these strong initial returns occurred during a generally positive month for the market. The ultimate test will be seeing where the AI-managed portfolio stands when the six-month experiment concludes.
More on AI innovations: OpenAI's ChatGPT Agent Clicks "I Am Not a Robot" Button Without a Wink of Irony
