Over the last couple of weeks, the ChatGPT chatbot created by OpenAI LLC. has quickly become the hottest point of discussion in the media covering innovative technology developments. The chatbot has intrigued people, attracting unprecedented attention to AI-based products.

Today we will discuss an AI technology called Watson, which was developed by International Business Machines (NYSE:IBM) as early as 2010. The technology can manage assets and create an investment portfolio. Let's take a look at the Top 5 stocks selected by Watson for the AI-Powered Equity ETF (NYSE:AIEQ).

What is Watson?

Watson is a Cloud platform software providing clients with a variety of AI-based services and instruments for big data analysis, processing and formatting, and optimising business processes.

The main uses of Watson are:

  • Watson Assistant is a platform for creating chatbots and virtual helpers based on AI.
  • Watson Discovery is an AI instrument for content search and analysis that can make conclusions from unstructured data.
  • Watson Language Translator is an AI translating service supporting a vast variety of languages.
  • Watson Natural Language Understanding is an AI service for the analysis of textual content.
  • Watson Speech to Text is an AI service for interpreting speech and transforming audio to text.
  • Watson Text to Speech is an AI service for transforming text to audio.
  • Watson OpenScale is a platform for managing and optimising AI models.
  • Watson Visual Recognition is an AI service for recognising, analysing, and classifying pictures and videos by set parameters.
  • Watson Studio is a data platform dedicated to machine learning and designing AI models.
  • EquBot is an AI investment platform that helps institutional investors make better financial decisions.

What we know about AI Powered Equity

AI Powered Equity is the first actively managed ETF that uses the IBM Watson AI technology for making forecast models for 6,000 US companies and choosing securities. The fund got started in 2017. When selecting a company, Watson analyses the following modules:

  • Financial
  • Information
  • News
  • Management

During the analysis, each module gets several signals based on which the decision is made whether to buy the company’s stocks.

AI Powered Equity is an actively managed fund, which means its portfolio is prone to frequent changes. At the moment this article was being written, the Top 5 list of the fund’s stocks in terms of the occupied share of the portfolio featured: JPMorgan Chase & Co. (NYSE:JPM), Las Vegas Sands Corp. (NYSE:LVS), Novavax Inc. (NASDAQ:NVAX), Uber Technologies Inc. (NYSE:UBER) and Builders FirstSource Inc. (NYSE:BLDR).

1. JPMorgan Chase – 4.75%

Founded in: 2000

Registered in: the US

Head office: New York, New York

Sector: financial services

Platform: NYSE

Market capitalisation: 412 billion USD

JPMorgan Chase & Co. is one of the largest US banks; it has a reputation as one of the most trustworthy and successful financial institutions in the world and is considered to be the leader of financial services. AI Powered Equity holds 41,223 shares of JPMorgan Chase & Co.; they account for 4.75% of the fund’s portfolio.

2. Las Vegas Sands – 4.35%

Founded in: 1988

Registered in: the US

Head office: Las Vegas, Nevada

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Sector: resorts and casinos

Platform: NYSE

Market capitalisation: 43.4 billion USD

Las Vegas Sands Corp. is a large representative of the global hotels & resorts business. Moreover, the company has other sources of income: conference halls, exhibition facilities, retail sales, restaurants, and entertainment venues. AI Powered Equity holds 93,458 shares of Las Vegas Sands Corp., which constitute 4.35% of the fund’s portfolio.

3. Novavax – 4.19%

Founded in: 1987

Registered in: the US

Head office: Gaithersburg, Maryland

Sector: healthcare

Platform: NASDAQ

Market capitalisation: 0.95 billion USD

Novavax Inc. designs and commercialises innovative vaccines for preventing and curing infections. It has a wide range of projects in various stages of development and research, including a candidate vaccine against COVID-19 NVX-CoV2373. The shares of Novavax Inc. in the AI Powered Equity portfolio take up 4.19% – 496,237 shares.

4. Uber Technologies – 3.67%

Founded in: 2009

Registered in: the US

Head office: San Francisco, California

Sector: software

Platform: NYSE

Market capitalisation: 73.3 billion USD

Uber Technologies Inc. is mostly famous for its taxi service. However, since it started operating, the company has mastered other branches of business, including food and meal delivery, a corporate taxi service, and non-emergency medical services. AI Powered Equity has bought 123,345 shares of Uber Technologies Inc., taking up 3.67% of the fund’s portfolio.

5. Builders FirstSource – 3.17%

Founded in: 1998

Registered in: the US

Head office: Dallas, Texas

Sector: building materials and equipment

Platform: NYSE

Market capitalisation: 12.3 billion USD

Builders FirstSource Inc. is the leading supplier of materials, services, and solutions for US building companies. The corporation employs over 26,000 employees from 5 countries. AI Powered Equity holds 48,059 shares of Builders FirstSource Inc., which makes up 3.17% of all the stocks in the portfolio.


Looking at the Top 5 stocks of the AI Powered Equity portfolio, we can conclude that IBM Watson diversifies portfolios quite well: all the companies are from different sectors. Also, this list changes quite frequently.

From March 2020 to November 2021, the stocks of the fund demonstrated 134% profitability, while the ETF SPDR S&P 500 (NYSE:SPY) which invests in S&P 500 stock index demonstrated 122% return. However, from January to October 2022, there was a 27% drop in the results of the latter, and the statistics of AI Powered Equity saw a 34% decline.

As we can see, the performance of an AI-managed fund is comparable to those of an index ETF. It should also be kept in mind that AI is on a constant learning curve and is improving, which may have a good influence on AI Powered Equity in the future.

Past performance is not a reliable indicator of future results or future performance.

The material presented and the information contained herein is for information purposes only and in no way should be considered as the provision of investment advice for the purposes of Investment Firms Law 87(I)/2017 of the Republic of Cyprus or any other form of personal advice or recommendation, which relates to certain types of transactions with certain types of financial instruments.

Material is prepared by

A trader since 2004, Eugene started actively investing on the US stock market in 2012. He now regularly publishes a variety of analytical articles about stocks on the RoboMarkets website and blog.