More and more individual investors are turning to artificial intelligence for stock research and investing to gain an edge in the market.
One Reddit user recently said he used AI startup Anthropic’s Claude Opus 4.6 large language model to build a stock-picking system based on the chairman of Berkshire Hathaway (NYSE: BRK, BRK.B) Warren Buffettinvestment philosophy. The goal of the experiment was simple: test the effectiveness of artificial intelligence in selecting stocks and see how the model-driven portfolio performed after the fact.
Redditors provided LL.M. Buffett with investor letters from 1977 to 2024, asking him to extract the most common investing principles and build a scoring system around them. The model uses a blind sample of 50 stocks, providing only financial data: 20 Berkshire-style holdings, 15 value candidates, and 15 speculative stocks.
According to Reddit users, the AI portfolio has generated returns of about 134% since 2020 in backtest simulations, outperforming Buffett’s equal-weighted portfolio and the S&P 500. Buffett’s real-weighted portfolio still leads the way with a return of about 165%, largely due to Berkshire Hathaway’s large position in Apple (NASDAQ: AAPL).
Let’s take a look at some important and surprising choices for artificial intelligence models.
Alphabet Inc. (NASDAQ:GOOGL,GOOG)) is the largest holding in the AI-Designed portfolio. The stock is up 71% in the last year. As of the end of December, Berkshire Hathaway held $5.59 billion worth of shares in the company.
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Shares of Visa Inc. (NYSE: V) fell 12% last year. At the end of last year, Berkshire Hathaway held a $2.91 billion stake in the payments giant.
Although Berkshire Hathaway has owned Procter & Gamble (NYSE: PG ) in the past, the stock is not part of its current portfolio. PG shares have fallen 4.3% in the past 12 months.
Coinbase Global Inc. (NASDAQ: COIN ) is the most surprising pick in the portfolio. Buffett has historically stayed away from cryptocurrencies and has often spoken out against them. Reddit posters suggested that the AI algorithm may have chosen Coinbase because its financial metrics made it look more like a value investment than a cryptocurrency play.
“It looks like a value stock with margins around 39% right now and low debt,” he said. “Depending on how you look at the experiment, Coinbase’s choice could mean good things or bad things.”
Texas Instruments (NASDAQ: TXN ) is another stock that’s causing concern because Berkshire has never owned the company. One Reddit user commented that this semiconductor company is a “textbook” choice for Buffett because of its strong market dominance in analog chips, stable cash flow, and history of capital returns.
Shares of Moody’s Corp (NYSE: MCO ) have been hit recently along with other financial data stocks amid concerns that artificial intelligence could disrupt the industry. The stock has fallen 13% in the past month. Berkshire Hathaway owns $12.6 billion worth of shares in the company.
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This article Latest AI model reads 48 years of Warren Buffett’s advice and builds stock portfolios for today’s market — Here are the 6 best stock picks and performers originally appeared on Benzinga.com
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