Artificial intelligence tools like ChatGPT are increasingly being used by retail investors for creative portfolio construction, and with escalating geopolitical tensions in the Middle East and Eastern Europe, some are now asking what a hypothetical “World War III portfolio” might look like.
The idea is straightforward: If military conflict becomes a driving force in markets, which companies stand to benefit?
Using current events as a starting point, Finbold asked ChatGPT to construct a $1,000 equity portfolio built to perform well in an environment of escalating global military conflict. The resulting portfolio focuses on five sectors that typically show resilience in wartime: defense and aerospace, cybersecurity, energy, materials, and food security.
For this analysis, let’s consider a hypothetical scenario where an investor allocated $1,000 equally across the stocks and ETFs suggested by ChatGPT.
Defense & Aerospace
The largest allocation went to traditional defense contractors. The model proposed investing $200 in Raytheon (NYSE: RTX) which supplies advanced missile systems and air defenses. Another $150 was allocated to Lockheed Martin (NYSE: LMT), maker of the F-35 fighter jet and global missile defense systems, while Northrop Grumman (NYSE: NOC) received $150 for its drone and stealth technology capabilities.
Cybersecurity stocks
Cyberwarfare is expected to play a central role in any modern global conflict. As such, the portfolio allocated $80 to Palo Alto Networks (NASDAQ: PANW) and $70 to CrowdStrike (NASDAQ: CRWD), both leaders in providing cybersecurity solutions to corporations and government agencies.
Energy stocks
Energy markets often react sharply to geopolitical instability. The AI model allocated $100 to Exxon Mobil (NYSE: XOM) as a hedge against oil supply disruptions and $50 to Schlumberger (NYSE: SLB), a global oilfield services firm.
Materials & Safe Havens
To provide ballast, $50 was directed toward Rio Tinto (NYSE: RIO), a global mining company with exposure to critical metals used in defense manufacturing. Another $50 was allocated to the SPDR Gold Shares ETF (NYSEARCA: GLD) as a traditional safe haven.
Food & Agriculture
Finally, the model allocated $50 to Archer-Daniels-Midland (NYSE: ADM) and $50 to Nutrien (NYSE: NTR), reflecting concerns that global food supply chains could be stressed in a large-scale conflict scenario.
Finally, while this hypothetical “WW3 portfolio” is not investment advice, it does reflect sectors that have historically shown strength in times of geopolitical turmoil. Defense contractors, cybersecurity firms, energy companies, gold, and agriculture stocks all serve distinct roles in helping a portfolio weather the uncertainties of global conflict.
Featured image via Shutterstock
